cured loans, we charge $25 for each $100 loaned.  Your fee will be $50 so all you have to do is write me a check for $250.   If you think you may not have enough funds to cover this loan in 14 days, be sure to come back before it is due, and we will make other arrangements."

Joanne was shown, and initialed a "Truth in lending" statement.  According to the statement, the annual percentage rate for this loan was 651.79%.  She gasped when she read it.

Mr. Nice laughed and told her that this was only a short-term loan. "Short term loan rates are different than loans that run a year or more," he said.  The man handed Joanne 10 crisp new $20 bills and she thanked him for being kind enough to loan her money.

Two weeks later Joanne still did not have enough money.  She returned and told Mr. Nice that she had a problem.  She said that she could pay part of the loan, but didn't have quite enough money to pay it all off in full.

"How much can you pay?" asked our open shirted Lender.

"I can pay half."  Said Joanne.

You should have told me this a day earlier." scolded Mr. Nice.  "We tried to process your post dated check and it bounced.  We will have to charge you a NSF check fee of $25.00.  Can write us a check for $150?"

"I can write you a check for $100 Said Joanne blinking away a tear.

"O. K." Said Mr. Nice, as he fingered his gold neck chain.  I will have you write me a check for $100 and then we will do a rollover.  Write me another post-dated check for $187.50.  This will cover the $150 you still owe us and include our fee of $37.50.  It will be due in 14 days. Just remember, that I am doing you a favor.  I put myself out on a limb when I gave you this loan."

Joanne wrote him a check.

Later that day Joanne told Grandma Ellen about her loan.  Grandma was not happy, in fact she was downright angry.  She told Joanne that she should have come to her for the money, instead of going to a loan shark.  She also volunteered to help her financially.  "I know a bit about the loan business," said Grandma.  "The strange thing is that 25 years ago these sharks didn't exist.  Over the last few years, banks have found it much more profitable for them to lend money to businesses instead of individuals.  This has hurt a lot of low-income folks like you, and has encouraged the growth of the legal loan shark business.   Oregon is one of 8 states with minimal regulations to restrict payday or title loan companies, and they know it.  In Oregon, a title lender is classified as a "short term loan licensee," and is exempt from state usury laws. Pawnbrokers have more laws controlling them than these Shylocks."

"Some Oregon Legislators have attempted to even things out a bit." Continued Grandma Ellen. "Senate Bill 545 and House Bill 2761 are attempting to limit the maximum interest that these people can charge to 180% a year. Both bills are presently sitting in Committee, and they may die there.  The loan sharks don't like them and are actively lobbying to derail their passage.  They say that they can't afford to do business at that low a rate."

"Can they?" Asked Joanne.

"Of course they can," said Grandma.  The state of Washington passed a similar bill and the sharks are still flourishing.  They are still making tons of money, only at a lower percentage rate."

Grandma picked up her purse. "Let's go see that shyster and pay your loan off."

Later that evening, a relieved and grateful Joanne sipped tea with her Grandmother. 

"Did you notice the fine print on the bottom of your receipt? Asked Grandma

"No" replied Joanne.

"Do you know who owns that loan company?" Said Grandma.