Oregon Legislative Update: Possessory Liens, Prize-Linked Savings Bills Still Alive

As the Oregon Legislature enters its fourth week of its short session, lobbyists, staffers and lawmakers are all asking, “When are we going to be done?” The session is scheduled to adjourn by March 9, but most insiders expect that will happen sometime next week.

While Cover Oregon, legalizing marijuana, new gun control measures and the Columbia River Crossing were all hot-button issues at the beginning of the session, most were too controversial to pass because of the limited time available for review and debate – an argument many advocates used, in fact, to work against bills they didn’t like.

Two major issues of interest to credit unions are still alive, however: House Bill 4103, a bill related to possessory liens; and House Bill 4079, which would establish a work group to discuss the concept of prized-linked savings.

HB 4103

House Bill 4103 makes the failure to provide notice of foreclosure sale an unlawful trade practice. The measure also holds harmless any person who purchases a vehicle at a foreclosure sale when the proper notice was not provided to the lien debtor or to the person with a security interest in the vehicle. The bill passed the House and was heard in the Senate Judiciary Committee, where amendments are being considered.

The Northwest Credit Union Association told the House Interim Committee on Consumer Protection and Government Efficiency that mechanic and towing liens are currently being foreclosed without proper notice or, in cases when notice is provided, under circumstances where charges are disputed as being unreasonable or for work performed without authorization. The current process allows the lien to be discharged by paying the lien claimant the amount of the lien claim, but there is not a clear process for disputing the amount of the claim.

The NWCUA has three goals for a final bill. It should:

  • Give credit unions a legal claim against the lien claimant (repair shop) if the lien claimant doesn’t give notice of the sale to the credit union;
  • Include attorney’s fees as part of the claim that credit unions can make for not giving notice; and 
  • Require the lien claimant to provide details about the amount of the lien as part of the notice process.

HB 4079

House Bill 4079 would direct the Lottery Commission to convene a work group to study and make recommendations about whether or not to allow financial institutions to offer prize-linked savings accounts under authority of the Oregon State Lottery. Several states have passed laws allowing credit unions and other financial institutions to hold promotional savings raffles, sometimes referred to as prize-linked savings programs. The laws in Maine, Washington and Maryland allow all financial institutions to offer the prize-linked savings programs, while those in Nebraska, North Carolina and Rhode Island apply only to credit unions.

Section 4, Article XV of the Oregon Constitution states that, with exceptions, “lotteries and the sale of lottery tickets, for any purpose whatever, are prohibited.” The exceptions are for lotteries or sales through the state Lottery Commission or by charitable, fraternal and religious organizations. Though “lottery” is not defined, the courts have generally defined the essential elements of a lottery as including a prize, consideration and chance. If the courts find that the element of “consideration” is present, a prize-linked savings program at a financial institution could be challenged as being unconstitutional.

HB 4079 passed out of committee and was referred to Ways and Means. Any official work group established by the state has to be funded, however, and that puts the bill at risk.

Pam Leavitt will report from Salem each week when the Oregon Legislature is in session; look for her “Oregon Legislative Update” every Tuesday in Anthem. For more information, contact Leavitt at pleavitt@nwcua.org.

Questions? Contact Gary Stein: 503.350.2216, gstein@nwcua.org.

Posted in Advocacy News.