The Legislature has just completed week one of its “Special Emergency Session.”
By State Representative Dennis Richardson,
I have several bills to discuss with you, beginning with a proposed new law on which I could use your help. Since this newsletter reaches concerned citizens (Independents, Democrats and Republicans) from all parts of Oregon, it is a great opportunity for me to get citizen input on important issues facing our state before a bill becomes law, rather than merely dealing with its consequences afterwards.
Today’s Issue. Should lenders, credit card and insurance companies be held to the same standards of fairness when dealing with consumers as other businesses? Background. This issue relates to the Unlawful Trade Practice Act (UTPA), which is a set of Oregon statutes (ORS 646.605 to 646.652) that protect consumers from unfair and illegal business practices. The UTPA gives the average citizen-consumer recourse for illegal conduct by businesses and corporations without increasing the size or cost of government.
The UTPA enables a consumer, either individually or through the Attorney General’s office, to file in county circuit court an action for illegal conduct by a business, without increasing government regulations and regulators. To make a claim, the consumer must prove that a business committed fraud or other bad acts, and caused actual financial harm to the consumer.
In short, the purpose of the UTPA is to level the playing field between consumers and businesses.
Although the UTPA applies to hundreds of businesses, until now it has exempted certain businesses, such as those that make loans, extend credit cards or provide insurance coverage. House Bill 3615, in its current configuration, would amend the UTPA, and remove the exemptions from the UTPA for businesses that provide “”¦loans and extensions of credit, [and] insurance”¦.”
Arguments In Favor of HB 3615. Those who favor HB 3615 state that many of the sky-rocketing number of home foreclosures have resulted from fraudulent conduct by unscrupulous lending officers. Complaints include those who testify they were told they were getting a 30 year fix-rate loan, when, in fact, they given an adjustable rate mortgage. One Gresham couple stated they never saw the letters “ARM” (which stands for “adjustable-rate mortgage,”) until after their monthly payment have jumped substantially. With the help of a consumer advocate, they reviewed every page of their closing documents and finally found, buried on one page out of the stack of papers, in fine print, in parenthesis the letters “ARM.” (Click here.) The proponents of HB 3615 support their allegation of widespread lending industry fraud and abuse with the following facts: In 2007 Oregon had 9,738 Foreclosures; in 2008 the number rose to 15,284; and, in only the first three quarters of 2009, Oregon Foreclosures had already climbed to 18,441. (The final 2009 figures are not yet available.)
Arguments Opposing HB 3615. The lending institutions and insurance companies would counter that they are already heavily regulated by government agencies, and to allow consumers or the Attorney General to bring civil actions against them under the terms of the UTPA, would be unfair. In addition, trial lawyers will use the UTPA as a vehicle to make money by filing many unnecessary and frivolous law suits, and if there are occasionally instances of fraud or misrepresentation, the aggrieved consumer can file a complaint with the appropriate regulatory agency. In short, opponents to HB 3615 are of the opinion that the current system is working just fine. Essentially, their position is, “if it is not broken, don’t fix it.”
Discussion. I have been a small-town attorney for 30 years, yet I cannot remember ever handling a case under the Unlawful Trade Practices Act. I could argue both in favor of and in opposition to HB 3615, but I would like to hear what you have to say about whether or not the lending and credit industries and/or the insurance companies should continue to be exempted from the UTPA, or should one or both of them lose their exempted status and be subject to the same rules against unlawful trade practices that other businesses must follow. (To take the brief survey on HB 3615, Click here.)
Oregon Special Session — Bills of Interest.
HB 3611. The federal tax code allows an employer a tax deduction for health insurance payments, but the same deduction is not allowed for the self employed or an individual plan. Oregon encourages the self employed and individuals to purchase their own insurance but does not provide any tax incentive such as that enjoyed by group insurance providers. In the 2009 legislative session HB 2116 was passed. It adds a 1% tax to premiums for health insurance plans purchased by individuals and self-employed workers. I co-sponsored HB 3611 because I believe it is only fair to allow an Oregon income tax deduction for individual and self employed health insurance premiums.
HB 3608. This is a bill that I am co-sponsoring this session. It is intended to help create family-wage paying jobs and benefit the environment by expanding the use of biomass. The bill establishes a tax credit for the transportation of woody biomass from forest management operations to biofuel producers. It also establishes tax credits for biomass electrical generation, as well as for the purchase of equipment to collect or process waste materials. In addition, HB 3608 directs the State Department of Energy to conduct a study of biomass facility sites in Oregon. HB 3608 is a good bill””it will help create jobs and it is good for the environment.
HB 3655. This bill passed the House on February 4th by a unanimous vote. It authorizes $19 million in additional unemployment benefits to Oregon workers. According to the Employment Department, the benefits will provide between two to six weeks of benefits per recipient. There are approximately 18,600 unemployed Oregon workers expected to benefit from this additional funding. With our state’s unemployment rate hovering around the 11% for the past year, these benefits will provide needed assistance to many unemployed Oregonians. There will be no additional fees assessed to Oregon businesses for this extension of benefits. They are already included in a previous unemployment insurance fee increase.
HB 3620. This bill, is known at The Main Street Plan, and previously was introduced during the 2009 session. It would encourage homeowners and businesses to invest in improvements to their property through a tax credit. Under the proposal, Oregonians would be able to claim 50% of the costs of their own capital construction projects, and “green” projects would qualify for a 100% tax credit. The additional work would benefit contractors, suppliers and manufacturers immediately, but to avoid a drastic reduction in tax revenues, the tax credits would be spread over a period of five years, beginning in the year following completion of the project. A nonpartisan analysis conducted in 2009 suggested that the plan would immediately create over 6,000 jobs across Oregon. HB 3620 creates investments in homes and businesses that will not only create jobs, but the capital improvements would also result in higher assessed values and, eventually, provide additional revenues to local government through increased property taxes. The Main Street Plan is truly a win-win proposition for all concerned. Unfortunately, it has yet to receive a fair hearing by legislative leadership.
That’s the news for week 1 of the Oregon 2010 Special “Emergency” Session. We are still searching for the “emergency,” but we will continue to do our best to represent the citizens of Oregon, to the best of our abilities.