Consumer credit, usury

WARM SPRINGS TRIBAL CODE
CHAPTER 740
CONSUMER CREDIT / USURY

Table of Contents

I. GENERAL
740.001 Legislative History
740.005 Jurisdiction
740.010 Scope
740.020 Definitions
740.030 Refunds or Penalties to Be Set Off Against Debt

II. CONSUMER CREDIT TRANSACTIONS AND AGREEMENTS
740.100 Written Agreement Required.
740.110 Required Disclosures
740.120 Co-Signers
740.130 Assignment of Obligation
740.140 Receipts for Payment
740.150 Extortionate Extensions of Credit
740.160 Unconscionable Transactions
740.170 Limitation on Default Charges
740.180 Discrimination Prohibited

III. LEGAL RATE OF INTEREST
740.200 Maximum Interest Allowable
IV. UNLAWFUL DEBT COLLECTION
740.300 Unlawful Debt Collection Practices
740.310 Remedy for Unlawful Debt Collection

WARM SPRINGS TRIBAL CODE
CHAPTER 740
CONSUMER CREDIT / USURY

I. GENERAL

740.001 Legislative History. This Chapter is adopted as part of a larger effort by the Confederated Tribes of the Warm Springs Reservation to establish a Warm Springs Commercial Code for the purpose of supporting and encouraging economic development activities on the Reservation, promoting the development of tribal member-owned businesses, and facilitating tribal member access to essential services such as housing and banking. One aspect of this effort is to provide a fair balance between the rights of lending institutions and other creditors and the protection of individual consumers. If Lenders are provided a fair remedy in Tribal Court, they will be more willing to extend credit to Reservation residents. However, the Tribes are highly protective of the rights of tribal members and other Reservation residents to be treated fairly and honestly in such transactions. This Chapter provides protection to consumers from predatory, unconscionable, deceptive or otherwise unlawful lending and debt collection practices.

740.5 Jurisdiction.

1. The Warm Springs Tribal Court has jurisdiction over cases arising under this Chapter.
2. The Warm Springs Tribal Court shall have jurisdiction over any person or legal entity who enters into a consumer credit transaction on the Reservation, or who brings an action in Warm Springs Tribal Court to enforce rights arising from a consumer credit transaction entered off the Reservation.

740.10 Scope. The provisions of this Chapter apply to the following consumer credit transactions:

1. Consumer credit transactions entered into on the Warm Springs Reservation of Oregon (“Reservation”). A consumer credit transaction is entered into on the Reservation if: (a) the contract, agreement or other writing evidencing the obligation is signed by one of the parties on the Reservation; or (b) the proceeds of the loan or the collateral for the loan is delivered by the consumer creditor or its authorized agent on the Reservation.
2. Any consumer credit transaction entered into with a resident of the Reservation, but not entered into on the Reservation, when the consumer creditor brings an action in Warm Springs Tribal Court to enforce rights arising from the consumer credit transaction. Any such consumer credit transaction agreement shall be reformed (modified) by the Tribal Court as necessary to comply with the requirements of this Chapter.

740.20 Definitions. As used in this Chapter:

1. “Agreement” means the bargain of the parties in fact as found in their language or writing.
2. “Consumer” means a natural person who is the buyer or debtor to whom credit is granted in a consumer credit transaction.
3. “Consumer credit sale” means a sale of goods or services for personal, family or household purposes in which credit is granted or arranged by a person who regularly engages in similar transactions.
4. “Consumer credit transaction” means a consumer credit sale or consumer loan or a refinancing or consolidation thereof.
5. “Commercial creditor” means the seller, lender or person who makes or arranges a consumer credit transaction and to whom the obligation under the transaction is initially payable, or the assignee of a consumer creditor’s right to payment.
6. “Consumer Loan” means a loan made or arranged by a person regularly engaged in the business of making loans for personal, family or household purposes
7. “Credit” means the right granted by a creditor to a consumer to defer payment of a debt or to incur a debt and defer its payment.
8. “Debt” means any obligation or alleged obligation arising out of a consumer credit transaction.
9. “Debtor” means a consumer who owes or allegedly owes an obligation arising out of a consumer credit transaction.
10. “Debt collector” means any person who by any direct or indirect action, conduct or practice, enforces or attempts to enforce an obligation that is owed or due to any commercial creditor, or alleged to be owed or due to any commercial creditor, by a consumer as a result of a consumer credit transaction.
11. “Person” means an individual, corporation, trust, partnership, incorporated or unincorporated association or any other legal entity.

740.030 Refunds or Penalties to Be Set Off Against Debt. Refunds or penalties to which the consumer is entitled pursuant to this Chapter may be set off against the consumer’s obligation and may be raised as a defense to any lawsuit in federal, state or tribal court, or any other legal proceeding, to enforce any rights arising under the consumer transaction without regard to the time limitations prescribed by this Chapter.

II. CONSUMER CREDIT TRANSACTIONS AND AGREEMENTS

740.100 Written Agreement Required. No consumer credit transaction shall be valid or enforceable unless its terms are contained in a written agreement and a copy is provided to the consumer at or before the time credit is extended.

740.110 Required Disclosures. No consumer credit transaction entered on the Reservation shall be valid or enforceable unless the creditor discloses to the consumer the information, disclosures, and notices required by the federal “Truth in Lending Act” regardless of whether the Act would otherwise apply to the transaction.

740.120 Co-Signers. A person is not obligated as a co-signer with respect to a consumer transaction unless, before or at the time of signing, he receives a copy of the writing setting forth the terms of the debtor’s obligation and a notice substantially similar to the following:

NOTICE

You agree to pay the debt identified below although you may not personally receive any property, services, or money. You may be sued for payment although the person who receives the property, services, or money is able to pay. This Notice is not the contract that obligates you to pay. Read the contract for the exact terms of the debt.

Identification of Debt You May Have to Pay

Name of Debtor

Name of Creditor

Kind of Debt

I have received a copy of this Notice.

Date: Signed:

740.130 Assignment of Obligation.

1. The consumer is authorized to pay the original creditor until the consumer receives written notification that the right to payments under the consumer credit agreement have been assigned and that payment is to be made to an assignee. A notification that does not reasonably identify the rights assigned shall be of no force or effect.. If requested by the consumer, the assignee must timely furnish reasonable proof that the assignment has been made.
2. With respect to a consumer credit sale, an assignee of the rights of the seller is subject to all claims and defenses of the buyer against the seller or arising from the sale of goods or services, notwithstanding that the assignee is a holder in due course of a negotiable instrument issued in connection with the consumer credit sale.
3. A claim or defense of a consumer specified in subsection (2) of this section may be asserted against the assignee under this section only to the extent of the amount owing to the assignee with respect to the sale of the goods or services.

740.140 Receipts for Payment.

1. The consumer creditor shall deliver or mail to the consumer, without request, a written receipt or periodic statement showing each payment on an obligation pursuant to a consumer credit transaction.
2. Upon written request of a consumer, the creditor of a consumer credit transaction shall provide a written statement of the dates and amounts of payments made within the twelve months preceding the month in which the request is received and the total amount unpaid as of the end of the period covered by the statement. The statement shall be provided without charge twice during each year of the term of the obligation. If additional statements are requested, the creditor may charge not more than ten dollars for each additional statement.
3. Within thirty days after a consumer has fulfilled all obligations with respect to a consumer credit transaction the creditor shall deliver or mail to the consumer written evidence acknowledging payment in full of all obligations with respect to the transaction and written evidence of release of any security interest and termination of any financing statement held, retained, or acquired.

740.150 Extortionate Extensions of Credit.

1. If it is the understanding of the creditor and the consumer at the time an extension of credit is made that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person, the repayment of the extension of credit is unenforceable through civil judicial processes against the consumer.
2. If it is shown that an extension of credit was made at an annual percentage rate exceeding 45 percent and that the creditor then had a reputation for the use or threat of use of violence or other criminal means to cause harm to the person, reputation, or property of any person to collect extensions of credit or to punish the nonpayment thereof, there is prima facie evidence that the extension of credit was unenforceable under subsection (1) of this section.

740.160 Unconscionable Transactions. The Court may refuse to enforce any agreement or part of any agreement which it finds to be unconscionable. In applying this Section, consideration shall be given to the following:

1. belief by the seller at the time of the transaction that there is no reasonable probability of payment in full by the consumer or debtor;
2. knowledge by the seller of the inability of the consumer to receive substantial benefits from the property or services sold;
3. gross disparity between the price of the property or services sold and the value of similar property or services readily obtainable in credit transactions by like consumers;
4. separate charges for insurance with respect to a consumer credit sale or consumer loan which have the effect of making the sale or loan, considered as a whole, unconscionable; and
5. the seller or lender has knowingly taken advantage of the inability of the consumer or debtor reasonably to protect his interests by reason of physical or mental infirmities, ignorance, illiteracy, inability to understand the language of the agreement, or similar factors.

740.170 Limitation on Default Charges. Except for reasonable expenses incurred in realizing on a security interest, the agreement with respect to a consumer credit transaction may not provide for charges as a result of default by the consumer other than those authorized by this code. A provision in violation of this section is unenforceable.

740.180 Discrimination Prohibited.

1. No consumer credit transaction regulated by this Chapter shall be denied any person, nor shall terms and conditions be made more stringent, on the basis of discrimination because of race, creed, religion, color, sex, marital status, national origin, or ancestry.
2. Any person injured as a result of violation of this section may bring an action in tribal court to recover actual damages or $200, whichever is greater. The court or the jury may award punitive damages, and the court may provide such equitable relief as it deems necessary or proper.
3. Consumer credit programs made available exclusively to tribal members of the Confederated Tribes of the Warm Springs Reservation or enrolled members of federally recognized Indian tribes are not prohibited under subsection (1) of this section.

III. LEGAL RATE OF INTEREST

740.200 Maximum Interest Allowable.

1. It shall be unlawful for any consumer creditor: (a) To extend credit to a consumer at an effective annual interest rate exceeding the greater of 36 percent or 30 percent in excess of the prime rate as established by the Federal Reserve Board of Governors, if the credit is unsecured; and (b) To extend credit to a consumer at an effective annual interest rate exceeding the greater of 24 percent or 20 percent in excess of the prime rate as established by the Federal Reserve Board of Governors, if the credit is secured.
2. Any person who violates subsection (1) of this section: (a) If the consumer credit transaction is entered into on the Reservation, shall forfeit the right to collect or receive any interest upon any loan for which a greater rate of interest or consideration than is permitted by subsection (1) of this section has been charged, contracted for or received, and the borrower on such a loan shall be required to pay only the principal amount borrowed; or (b) If the consumer credit transaction is not entered into on the Reservation, shall forfeit the right to receive any interest in excess of the maximum interest allowed under section (1) of this section upon any loan for which a greater rate of interest or consideration than is permitted by subsection (1) of this section has been charged, contracted for or received.

IV. UNLAWFUL DEBT COLLECTION

740.300 Unlawful Debt Collection Practices. It shall be an unlawful collection practice for a debt collector, while collecting or attempting to collect a debt to do any of the following:

1. Use or threaten the use of force or violence to cause physical harm to a debtor or to the debtor’s family or property;
2. Threaten arrest or criminal prosecution;
3. Threaten the seizure, attachment or sale of a debtor’s property when such action can only be taken pursuant to court order without disclosing that prior court proceedings are required;
4. Use profane, obscene or abusive language in communicating with a debtor or the debtor’s family;
5. Communicate with the debtor or any member of the debtor’s family repeatedly or continuously or at times known to be inconvenient to that person with intent to harass or annoy the debtor or any member of the debtor’s family;
6. Communicate or threaten to communicate with a debtor’s employer concerning the nature or existence of the debt;
7. Communicate without the debtor’s permission or threaten to communicate with the debtor at the debtor’s place of employment if the place is other than the debtor’s residence, except that the debt collector may write to the debtor at the debtor’s place of employment if no home address is reasonably available and if the envelope does not reveal that the communication is from a debt collector other than a provider of the goods, services or credit from which the debt arose;
8. Communicate with the debtor in writing without clearly identifying the name of the debt collector, the name of the person, if any, for whom the debt collector is attempting to collect the debt and the debt collector’s business address, on all initial communications. In subsequent communications involving multiple accounts, the debt collector may eliminate the name of the person, if any, for whom the debt collector is attempting to collect the debt, and the term “various” may be substituted in its place;
9. Communicate with the debtor orally without disclosing to the debtor within 30 seconds the name of the individual making the contact and the true purpose thereof;
10. Cause any expense to the debtor in the form of long distance telephone calls, telegram fees or other charges incurred by a medium of communication, by concealing the true purpose of the debt collector’s communication;
11. Attempt to or threaten to enforce a right or remedy with knowledge or reason to know that the right or remedy does not exist, or threaten to take any action which the debt collector in the regular course of business does not take;
12. Use any form of communication which simulates legal or judicial process or which gives the appearance of being authorized, issued or approved by a governmental agency, governmental official or an attorney at law when it is not in fact so approved or authorized;
13. Represent that an existing debt may be increased by the addition of attorney fees, investigation fees or any other fees or charges when such fees or charges may not legally be added to the existing debt;
14. Collect or attempt to collect any interest or any other charges or fees in excess of the actual debt unless they are expressly authorized by the agreement creating the debt and/or expressly allowed by law;
15. Threaten to assign or sell the debtor’s account with an attending misrepresentation or implication that the debtor would lose any defense to the debt or would be subjected to harsh, vindictive or abusive collection tactics.; or
16. To enforce or attempt to enforce by use of any direct or indirect action, conduct or practice, an obligation made void and unenforceable by any provision of tribal law.

740.310 Remedy for Unlawful Debt Collection.

1. Any person injured as a result of willful use or employment by another person of an unlawful collection practice may bring an action in tribal court to enjoin the practice or to recover actual damages or $200, whichever is greater. The court may award punitive damages, and the court may provide such equitable relief as it deems necessary or proper.
2. Actions brought under this section shall be commenced within one year from the date of the injury.