Oregon

Definitions for ORS 697.602 to 697.842

As used in ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director): (1)“Consumer” means an individual who is obligated or is allegedly obligated to pay a debt and on whose behalf a debt management service provider performs or agrees to perform a debt management service. (2) “Debt management service” means an activity for which a person receives money or other valuable consideration or expects to receive money or other valuable consideration in return for:

(a) Receiving or offering to receive funds from a consumer for the purpose of distributing the funds among the consumer’s creditors in full or partial payment of the consumer’s debts, whether or not the person holds the consumer’s funds;

(b) Improving or offering to improve or preserve a consumer’s credit record, credit history or credit rating;

(d) Obtaining or attempting to obtain as an intermediary on a consumer’s behalf a concession from a creditor including, but not limited to, a reduction in the principal, interest, penalties or fees associated with a debt.

(3)“Debt management service provider” means a person that:

(a) Resides or does business in this state; and

(b) Provides or performs, or represents that the person can or will provide or perform a debt management service in return for or in expectation of money or other valuable consideration.

(4)“Nationwide Multistate Licensing System” means a system that the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, or assigns of the Conference of State Bank Supervisors or the American Association of Residential Mortgage Regulators, develop and maintain for participating state agencies to use in licensing and registering mortgage loan originators and other persons that provide nondepository financial services. (5)“Nonprofit entity” means a person, corporation, organization, board, association or other entity described in 26 U.S.C. 501(c)(3), as in effect on June 26, 2009, that is exempt from taxation under 26 U.S.C. 501(a). [1983 c.17 §2; 1987 c.373 §45; 1993 c.744 §21; 2009 c.604 §1; 2015 c.118 §4]

ORS 697.612 Registration requirement exceptions

(1)A person that has not registered with the Director of the Department of Consumer and Business Services under ORS 697.632 (Registration procedure) may not engage in business in this state in the course of which the person:

(a)Performs a debt management service; or

(b)Receives money or other valuable consideration or expects to receive money or other valuable consideration for:

(A)Soliciting or receiving an application from a consumer for a debt management service;

(B)Forwarding or providing a completed application for a debt management service to a debt management service provider;

(C)Referring a consumer to another debt management service provider, if the person is a debt management service provider;

(D)Providing a consumer’s name, address or other information that identifies the consumer to a debt management service provider for the purpose of arranging the provision of a debt management service; or

(E)Providing advice, assistance, instruction or instructional material concerning a debt management service to a consumer.

(2)A debt management service provider registered under ORS 697.632 (Registration procedure) may negotiate on a consumer’s behalf for a reasonable alternative repayment schedule or to reduce a claim described in 11 U.S.C. 502 if the debt management service provider is a nonprofit budget and credit counseling agency approved in accordance with 11 U.S.C. 111. (3)Subsection (1) of this section does not apply to:

(a)An employee of a debt management service provider, if the debt management service provider is registered under ORS 697.632 (Registration procedure).

(b)An attorney licensed or authorized to practice law in this state, if the attorney provides a debt management service only incidentally in the practice of law.

(c)A financial institution or a trust company, both as defined in ORS 706.008 (Additional definitions for Bank Act).

(d)A consumer finance company licensed under ORS chapter 725.

(e)An escrow agent licensed under ORS 696.505 (Definitions for ORS 696.505 to 696.590) to 696.590 (Penalty amounts) to the extent that the escrow agent is acting to close an escrow, as defined in ORS 696.505 (Definitions for ORS 696.505 to 696.590), is engaging in activity related to a collection escrow, as defined in ORS 696.505 (Definitions for ORS 696.505 to 696.590), or is serving as a trustee of a trust deed in accordance with ORS 86.713 (Qualifications of trustee). This paragraph does not apply if the escrow agent:

(A)Assists an unregistered debt management service provider that is not exempt from registration under this subsection in performing a debt management service; or

(B)Provides escrow services to a consumer in accordance with a debt management services plan executed by an unregistered debt management services provider that is not exempt from registration under this subsection.

(f)A mortgage banker or mortgage broker licensed under ORS 86A.095 (Short title) to 86A.198 (Materials in languages other than English) or a mortgage loan originator, as defined in ORS 86A.100 (Definitions).

(g)A broker-dealer registered with the United States Securities and Exchange Commission or the United States Commodity Futures Trading Commission, if the broker-dealer is subject to and acts in accordance with regulations promulgated by either commission.

(h)A consumer reporting agency, as defined in 15 U.S.C. 1681a(f).

(i)A public body, as defined in ORS 174.109 (“Public body” defined).

(j)A person that is obeying or acting in accordance with a court order.

(k)An accredited educational institution or program that offers or performs a debt management service without receiving money or other valuable consideration, if the institution or program performs the debt management service as an incidental part of a class or a duty the institution or program provides regularly.

(L)A nonprofit budget and credit counseling agency approved in accordance with 11 U.S.C. 111 that:

(i)Provides only an individual or group briefing, as described in 11 U.S.C. 109(h), or an instructional course concerning personal financial management, as described in 11 U.S.C. 111; and

(ii)Does not receive or offer to receive funds from a consumer for the purpose of distributing the funds among the consumer’s creditors in full or partial payment of the consumer’s debts.

(m)A nonprofit entity that provides advice, assistance, instruction or instructional materials to a consumer in return for a fee that is reasonably calculated to pay the cost of making the advice, assistance, instruction or instructional materials available. (n)An organization or a counselor approved by the United States Department of Housing and Urban Development under 12 U.S.C. 1701x. [1983 c.17 §3; 2009 c.604 §2; 2009 c.863 §41; 2013 c.444 §2]

ORS 697.632 Registration procedure

fees
rules

(1)(a) The Director of the Department of Consumer and Business Services shall maintain a registry of debt management service providers and by rule in accordance with ORS chapter 183 shall require a person that performs a debt management service, unless the person is exempt under ORS 697.612 (Registration requirement) (3), to apply to the director to register or to renew a registration as a debt management service provider. (b)The director, consistent with the requirements of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director), may administer a program to register debt management service providers, or renew registrations, by means of an agreement with the Nationwide Multistate Licensing System and may, by rule, conform the practices, procedures and information that the Department of Consumer and Business Services uses to register a debt management service provider, or renew a registration, to the requirements of the Nationwide Multistate Licensing System. (c)An application for registration or renewal must provide to the director on a form and in a format the director specifies: (A)The applicant’s name and address; (B)Any assumed business names, trade names or other identities under which the applicant performs a debt management service; (C)A general description of the debt management service business activities the applicant undertakes or proposes to undertake; (D)The names of any managing members, managing partners, executive officers, directors, principals or agents the applicant has; (E)The name of the applicant’s registered agent or the applicant’s agent for the purpose of receiving service of legal process; (F)A signed statement that identifies and describes in detail any incident in which the applicant or a member, partner, officer, director or principal of the applicant within the five years before the date on which the applicant applied to register or renew a registration as a debt management service provider was subject to: (i)A judgment in favor of another person in a circuit court of this state or in an equivalent court in another state; (ii)An arbitration award in favor of another person; or (iii) An adverse final order from an administrative agency in this state or another state; (G)A copy of the corporate surety bond the applicant filed with the director under ORS 697.642 (Bond requirement); (H)Fingerprints for any of the applicant’s executive officers, and officers and managers with supervisory responsibility over the applicant’s activities, with which the director may conduct a criminal records check that the director may process through the Nationwide Multistate Licensing System; and (I)Other information the director may require concerning the financial responsibility, training, background, experience and business activities of the applicant or a member, partner, officer, director or principal of the applicant. (2)At the time an applicant submits an application for registration under this section, the applicant shall pay a nonrefundable fee in an amount the director specifies by rule. An applicant who applies to renew a registration shall pay another fee in an amount the director specifies by rule. (3)The director shall specify amounts for the fees described in subsection (2) of this section that in the aggregate are sufficient to pay the costs of administering ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). The director shall pay all moneys received under this section as provided in ORS 697.842 (Disposition of moneys received by director). (4)A registration under this section is valid until December 31 of the calendar year in which the director approves the registration. In order to continue to provide a debt management service, a debt management service provider must renew the registration at the time the registration expires. (5)(a) The director may refuse to register the applicant or may refuse to renew a registration for a debt management service provider for any of the reasons set forth in ORS 697.752 (Grounds for denial, revocation or suspension of registration). (b)The director, for good cause shown or in order to conform the department’s licensing and license renewal program to the requirements of the Nationwide Multistate Licensing System, may waive a requirement of this section with respect to a license application or may allow an applicant to substitute information required in an application in lieu of information required under this section. [1983 c.17 §5; 1989 c.209 §1; 2009 c.604 §3; 2015 c.118 §5; 2019 c.106 §3]

ORS 697.642 Bond requirement

(1)An applicant for registration as a debt management service provider at the time of application shall file with the Director of the Department of Consumer and Business Services a bond issued by one or more corporate sureties authorized to do business in this state. The bond must: (a)Be in an amount that is: (A)A minimum of $10,000; or (B)An amount the director specifies by rule. (b)Require the surety company to provide written notice to the director by registered or certified mail: (A)At least 30 days before the surety company cancels or revokes the bond; or (B)Whenever the surety company pays for a loss under the bond. (c)Satisfy the provisions of subsection (2) of this section. (2)The bond that a debt management service provider must file under subsection (1) of this section, in addition to the requirements set forth under subsection (1) of this section, must be: (a)Payable to the order of the director; and (b)Conditioned so that the corporate surety or the debt management service provider upon the director’s order or a court order pays all amounts due for a violation of the debt management service provider’s duties and obligations to consumers under ORS 697.652 (Written agreement and budget analysis requirement) to 697.702 (Interference with records of debt management service provider). (3)If a surety cancels, revokes or otherwise terminates a bond required under subsection (1) of this section or if the amount of the bond is reduced to less than the amount required under subsection (1) of this section, the debt management service provider shall immediately: (a)File a replacement bond; or (b)Surrender the debt management service provider’s registration to the director and cease operating as a debt management service provider or providing debt management services. (4)A person that has a right of action against a debt management service provider under ORS 697.718 (Liability for consumer’s ascertainable loss) has a right of action against the bond required under subsection (1) of this section. [1983 c.17 §6; 1989 c.209 §2; 2009 c.604 §4]

ORS 697.652 Written agreement and budget analysis requirement

contents and form of agreement
waiver of requirements void

(1) A debt management service provider may not perform a debt management service for a consumer without entering into a written agreement with the consumer that: (a)Lists the name and telephone number for the debt management service provider and the consumer and, to the extent the information is available, the facsimile number, electronic mail address and website address or other Internet uniform resource locator for the debt management service provider. (b)Lists every debt for which the debt management service provider will provide a debt management service on the consumer’s behalf. The list must disclose the creditor’s name and the approximate total of all of the identified debts. (c)States in precise terms how much the consumer can reasonably pay, if the debt management service provider holds, directly or indirectly, a consumer’s funds for distribution to creditors. (d)Describes in precise terms the debt management services the debt management service provider will perform, itemizes the fees the debt management service provider will charge and explains how the debt management service provider calculated the amount of the fees. (e)Shows in the form of a schedule the approximate number of installments, the amount of each installment and the ratio or other arrangement that will apply to the consumer’s payment or satisfaction of the debts. (f)Provides that the consumer may: (A)Examine the consumer’s account in the debt management provider’s office during office hours; or (B)Request the debt management service provider to deliver to the consumer a full and complete written statement of the consumer’s account: (i)Within two business days, if the debt management service provider delivers the statement electronically; or (ii)Within seven business days, if the debt management service provider delivers the statement by mail. (g)Provides that the debt management service provider may cancel the agreement without the consumer’s written authorization if the consumer fails to make scheduled periodic payments under the terms of the agreement for more than 60 days. (h)Estimates the time period necessary to complete the debt management services identified in the agreement. (i)Provides that the debt management service provider must deliver to the consumer each calendar quarter a financial statement of the consumer’s funds, if any, that the debt management service provider holds, directly or indirectly. (j)Provides that: (A)The consumer may cancel the agreement: (i)At any time before midnight of the third business day after the consumer entered into the agreement with the debt management service provider; or (ii)At any time during the remaining term of the agreement, for any reason, after giving 10 calendar days’ written notice of the cancellation to the debt management service provider; (B)The consumer’s cancellation is effective on the date the consumer mails a notice of cancellation or immediately if the consumer sends the cancellation by electronic mail or facsimile; and (C)The debt management service provider shall: (i)Refund all fees the consumer paid before the cancellation if the consumer cancels the agreement under subparagraph (A)(i) of this paragraph; or (ii)Return to the consumer all of the consumer’s funds that the debt management service provider has not expended from among the funds that the debt management service provider holds, directly or indirectly, if the consumer cancels the agreement under subparagraph (A)(ii) of this paragraph. (k)Provides that the debt management service provider shall notify the consumer’s creditors in writing that the debt management service provider may negotiate with the creditors concerning the consumer’s debts on the consumer’s behalf. (2)Before the consumer and the debt management service provider sign the agreement described in subsection (1) of this section, the debt management service provider shall give the consumer an analysis of the consumer’s budget that is separate from the agreement and that evaluates whether the debt management services the debt management service provider proposes to perform are advantageous to the consumer. (3)As soon as is practicable after the consumer and the debt management service provider sign and date the agreement described in subsection (1) of this section, the debt management service provider shall provide the consumer with a legible copy of the signed and dated agreement. (4)(a) A consumer’s waiver or an agreement or contract between a debt management service provider and a consumer that purports to waive or otherwise violate a provision of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director) is void and unenforceable as contrary to public policy. (b)A debt management service provider may not induce or attempt to induce a consumer to waive a provision of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). (c)A person that claims an exemption from a provision of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director) has the burden of proof with respect to the claim in a proceeding under ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). (d)A circuit court of this state has jurisdiction in equity to restrain and enjoin a violation of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). (e)This subsection does not prohibit a person from enforcing a right provided under ORS 646.608 (Additional unlawful business, trade practices) and 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director) or other applicable law. [1983 c.17 §7; 2009 c.604 §5]

ORS 697.662 Prohibited practices

A debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) may not: (1)Make, or counsel or advise a consumer to make, a statement that is untrue or misleading or that the debt management service provider or the person in the exercise of reasonable care should know is untrue or misleading. (2)Represent that the debt management service provider or the person is authorized or competent to perform a debt management service or to furnish advice concerning tax, accounting, bankruptcy or legal matters unless the debt management service provider or the person is actually authorized under the laws of this state to perform the debt management service or furnish the advice or the debt management service provider or the person performs the debt management service or furnishes the advice in compliance with the laws of this state. (3)Charge or receive money or other valuable consideration solely to refer a consumer to another person who may or will extend credit to the consumer on substantially the same terms that the other person provides to the other person’s customers. (4)Offer to perform a debt management service without evaluating as part of the budget analysis the debt management service provider must perform under ORS 697.652 (Written agreement and budget analysis requirement) (2) whether the debt management service is or would be advantageous to the consumer. (5)Perform a debt management service without having a good faith belief formed after conducting an evaluation described in subsection (4) of this section that the consumer can or will comply with the terms of the agreement described in ORS 697.652 (Written agreement and budget analysis requirement). (6)Solicit, accept or receive an agreement, contract, promise to pay or other instrument that has blank spaces at or after the time the consumer signs the agreement, contract, promise to pay or instrument. (7)Accept or receive from a consumer: (a)Payment or security for the debt management service provider’s or person’s fees or charges other than as provided in ORS 697.692 (Fees) (2); (b)A wage assignment, a mortgage on real estate, a purchase money security interest or other security, all or any part of which is in an amount larger than permitted under ORS 697.692 (Fees), to secure the debt management service provider’s or person’s fees or charges; (c)A confession of judgment or a power of attorney to confess judgment against the consumer or to appear for the consumer in a judicial proceeding; or (d)A release of an obligation that the debt management service provider or person must perform. (8)Agree or form a contract with a consumer, the terms of which provide for later charges or reserves for liquidated damages. (9)Commingle any of the consumer’s wages, salary, income, credits or other funds or property that the debt management service provider or person holds with the debt management service provider’s or person’s funds or property. (10)Cancel an agreement with a consumer without the consumer’s written authorization, except as provided in ORS 697.652 (Written agreement and budget analysis requirement) (1)(g). (11)Violate a provision of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). (12)Publish, distribute or broadcast or cause to be published, distributed or broadcast an advertisement, presentation or other communication or promotional material that: (a)Contains a false, misleading or deceptive statement or representation, including a statement or representation that the debt management service provider or person can alter or remove factually correct information from a consumer’s credit report; (b)Identifies the debt management service provider or person by a name other than the name that appears on the registration that the Director of the Department of Consumer and Business Services issued or the assumed business name that the debt management service provider or person registered under ORS chapter 648; (c)Displays an emblem, logo or other sign or device that is similar to an emblem, logo, sign or device that a government agency uses to identify the government agency or a product or service the government agency provides, including but not limited to an eagle, flag or crest; or (d)Misrepresents, directly or indirectly: (A)The nature of a service the debt management service provider or person will perform; (B)The time within which the debt management service provider or person will perform a service; (C)The debt management service provider’s or person’s ability to improve a consumer’s credit report or credit rating; (D)The amount, type or quality of credit a consumer may or will receive as a result of a service the debt management service provider or person performs or offers to perform; or (E)The debt management service provider’s or person’s qualifications, training or experience or the qualifications, training or experience of the debt management service provider’s or the person’s employees, agents or affiliates. [1983 c.17 §8; 2005 c.309 §4; 2009 c.604 §6]

ORS 697.672 Requirement to make, keep and maintain records

rules

(1) A debt management service provider shall make, keep and maintain accounts, correspondence, memoranda, papers, books and other records that the Director of the Department of Consumer and Business Services by rule determines are necessary to ensure that the debt management service provider is complying with the provisions of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). (2)A debt management service provider shall maintain records for each consumer with which the debt management service provider does business in a form and with contents the director specifies by rule. The debt management service provider shall maintain each consumer record for a period of three years after the date of the last entry in the record. The debt management service provider may dispose of the record in accordance with applicable law after the three-year period described in this subsection has expired. (3)A debt management service provider shall record all disbursements that the debt management service provider makes, if any, to a consumer’s creditors. (4)The director may at any reasonable time examine the debt management service provider, the records described in subsection (1) of this section or the debt management service provider’s activities in connection with performing a debt management service. [1983 c.17 §9; 2009 c.604 §7]

ORS 697.682 Trust accounts for client funds

statements

A debt management service provider that holds a consumer’s funds, directly or indirectly, shall establish a trust account in this state with an insured institution, as defined in ORS 706.008 (Additional definitions for Bank Act), in which to keep the consumer funds that the debt management service provider holds.
The debt management service provider may establish a separate trust account for each consumer with whom the debt management service provider does business, or may establish a single trust account in which the debt management service provider keeps all consumer funds. If the debt management service provider establishes a single trust account, the debt management service provider shall maintain a separate ledger or other record of receipts and disbursements for each consumer on whose behalf the debt management service provider holds funds in the account. The debt management service provider in the financial statement required under subsection (4) of this section and the agreement described in ORS 697.652 (Written agreement and budget analysis requirement) shall disclose the amount of interest earned on the consumer’s funds in the separate trust account or the amount attributable to the consumer’s share of the single trust account to the extent that the interest earned exceeds the fees the financial institution charges to maintain the trust account.
The debt management service provider shall deposit into the trust account all wages, salary, income, credits or proceeds from property that the debt management service provider receives from the consumer or the consumer’s property and shall disburse from the trust account all payments the debt management service provider makes on the consumer’s behalf, including payments of the debt management service provider’s fees or charges.
The debt management service provider without charge shall provide to the consumer in accordance with the terms of the agreement described in ORS 697.652 (Written agreement and budget analysis requirement), or at the consumer’s request for the period of time the consumer specifies, a statement of the funds or property that the debt management service provider received from or on behalf of the consumer and the disbursements that the debt management service provider made from the trust account under the terms of the agreement.
A debt management service provider may not deposit in a trust account on a single consumer’s behalf more than $250,000 in consumer funds. [1983 c.17 §10; 2009 c.604 §8]

ORS 697.692

Fees

circumstances in which consumer may void contract
prohibition of waiver
Rules

(1)Subject to subsection (4) of this section, a debt management service provider may charge a consumer only the following fees: (a)An initial fee of not more than $50. (b)A fee reasonably calculated to recover the costs that the debt management service provider incurs in providing an initial counseling session or education class. The debt management service provider may charge the fee described in this paragraph in advance, but the fee may not exceed $50. (c)A monthly fee equivalent to 15 percent of the funds that the debt management service provider receives from a consumer for payment to the consumer’s creditors. The debt management service provider may charge the fee described in this paragraph only if the debt management service provider holds a consumer’s funds, directly or indirectly, on the consumer’s behalf. The fee described in this paragraph may not exceed $65 per month. (d)A fee equivalent to 15 percent of the amount of debt a consumer owes to one or more creditors at the time the consumer signs the agreement described in ORS 697.652 (Written agreement and budget analysis requirement) and places funds in a bank account that the consumer establishes or maintains in the consumer’s own name with an insured institution, as defined in ORS 706.008 (Additional definitions for Bank Act), and designates specifically for making disbursements in connection with a debt management service. The debt management service provider may charge the fee described in this paragraph only if the debt management service provider does not hold a consumer’s funds directly or indirectly. The debt management service provider may not charge the fee described in this paragraph in amounts or installments that exceed $65 per month. (e)A fee equivalent to 7.5 percent of the difference between the principal amount of the debt the consumer owed to the consumer’s creditor at the time the consumer signed the agreement described in ORS 697.652 (Written agreement and budget analysis requirement) and the amount the consumer paid to the creditor to settle the debt, exclusive of fees the consumer paid to the debt management service provider under paragraph (a), (b) or (d) of this subsection. The debt management service provider may charge the fee described in this paragraph only if the debt management service provider obtains from the consumer’s creditor a reduction in the principal amount of the consumer’s debt. (f)A fee of not more than $50 per month during the term of an agreement between the consumer and the debt management service provider under which the debt management service provider improves or preserves, or offers to improve or preserve, a consumer’s credit record, credit history or credit rating but does not conduct a budget analysis for the consumer, act as a broker for another debt management service provider or otherwise engage in any other activity that constitutes a debt management service. A fee that a debt management service provider charges under paragraph (a) of this subsection is the fee for the first month of service under this paragraph. (2)A debt management service provider may accept payment for a fee described in subsection (1) of this section by means of: (a)A check, draft or similar paper instrument; or (b)A transfer of funds through an electronic terminal, telephonic instrument, computer or magnetic tape that transmits an order, instruction or authorization to a financial institution to debit or credit an account. (3)(a) A consumer may void a contract for debt management services, and a debt management service provider shall return to the consumer all sums the consumer paid to the debt management service provider and reimburse the consumer for reasonable attorney fees the consumer incurred in any action to enforce rights the consumer has under this subsection, if the debt management service provider charges the consumer more than the amounts set forth in this section. (b)A consumer may not waive any of the rights the consumer has under this subsection, and any provision in any contract or other agreement that purports to waive the consumer’s rights is void. (4)The director by rule may adjust the fees set forth in this section to reflect changes in the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor. In adjusting fees, the director may consider whether changes in fees that other states charge for similar services warrant a change in fees in this state. [1983 c.17 §11; 1999 c.483 §1; 2005 c.309 §1; 2009 c.604 §§9,9a; 2017 c.465 §1]

ORS 697.702 Interference with records of debt management service provider

(1)A person commits the offense of interfering with records of a debt management service provider if, with respect to a record to which ORS 697.672 (Requirement to make, keep and maintain records) applies, the person intentionally: (a)Makes a false entry in the record; or (b)Mutilates, destroys or otherwise disposes of the record. (2)Subsection (1)(b) of this section does not apply to a debt management service provider that disposes of a record after the retention period set forth in ORS 697.672 (Requirement to make, keep and maintain records) expires. [1983 c.17 §12; 2005 c.338 §16; 2009 c.604 §10]

ORS 697.707 Required disclosures

(1)A debt management service provider may not charge or receive from a consumer a fee described in ORS 697.692 (Fees) until after the debt management service provider makes the disclosures described in this section. (2)A debt management service provider shall give to every consumer for whom the debt management service provider offers to perform a debt management service a document that: (a)States the maximum amount the debt management service provider may charge the consumer for all debt management services that the debt management service provider will perform; (b)States that the consumer is responsible for paying the debt management service provider’s charges; (c)Warns the consumer that canceled debt may constitute income that is subject to state and federal taxation and advises the consumer to consult with a tax professional; (d)Describes completely and in detail the debt management services that the debt management service provider will perform for the consumer and states the amount the consumer must pay for each service and for all services; and (e)States that the consumer may bring an action against the bond required under ORS 697.642 (Bond requirement) and lists the name and address of the surety that issued the bond. (3)A debt management service provider that performs a debt management service as defined in ORS 697.602 (Definitions for ORS 697.602 to 697.842) (2)(b) or described in ORS 697.612 (Registration requirement) (1)(b)(E), in the document required under subsection (2) of this section, shall: (a)Describe, accurately and completely, the consumer’s right to review consumer credit information about the consumer that a consumer reporting agency, as defined in 15 U.S.C. 1681a, maintains; and (b)State the approximate price that a consumer reporting agency will charge a consumer to review the consumer credit information described in paragraph (a) of this subsection and that the consumer may review the information at no charge if the consumer makes a request to the consumer reporting agency within 30 days after the consumer was denied credit. (4)A debt management service provider that does not hold a consumer’s funds, directly or indirectly, shall include in the document required under subsection (2) of this section these additional statements: (a)That the debt management service provider does not predict or guarantee specific results and cannot force or require a creditor to accept a specific settlement; (b)That the debt management service provider does not make scheduled periodic payments to creditors; (c)That creditors may continue collection efforts, including lawsuits; (d)That the consumer’s failure to make monthly payments on outstanding debt will likely have a negative impact on the consumer’s credit score; (e)That the consumer must make regular monthly deposits of funds in an account the consumer establishes and maintains in the consumer’s name with an insured institution, as defined in ORS 706.008 (Additional definitions for Bank Act), and designates specifically for making disbursements in connection with a debt management service; and (f)That the debt management service provider will withdraw fees for debt management services from the account described in paragraph (e) of this subsection only with the consumer’s specific authorization and that the debt management service provider does not have custody, control or separate or additional access to the account. (5)The document described in this section must provide a space for the consumer to sign the form under a statement that indicates that the consumer has read and understands the disclosures set forth in the document. [2005 c.309 §3; 2009 c.604 §11]

ORS 697.718 Liability for consumer’s ascertainable loss

limitation on time to commence action

(1)A debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) is liable to a consumer who suffers an ascertainable loss of money or property, real or personal, in connection with the debt management service provider’s or person’s violation of a provision of ORS 697.652 (Written agreement and budget analysis requirement), 697.662 (Prohibited practices), 697.682 (Trust accounts for client funds), 697.692 (Fees) or 697.707 (Required disclosures). (2) Except as provided in this subsection, an action or suit may not be commenced under this section more than three years after the date on which the debt management service provider or person enters into an agreement for a debt management service with the consumer that suffered the ascertainable loss of money or property or more than three years after the debt management service provider or person performs a debt management service that violates ORS 697.652 (Written agreement and budget analysis requirement). An action under this section may be commenced within three years after the transaction that is the subject of the action or within two years after the facts on which the action is based were or should have been discovered, but an action may not be commenced more than five years after the transaction. Failure to commence an action on a timely basis is an affirmative defense. (3)A consumer that has a right of action against a debt management service provider under this section has a right of action against the bond required under ORS 697.642 (Bond requirement). (4)A court may award reasonable attorney fees to the prevailing party in an action brought under this section. [2009 c.604 §20]

ORS 697.722 Execution or attachment of trust account funds

Funds in a trust account that a debt management service provider maintains under ORS 697.682 (Trust accounts for client funds) are not subject to execution or attachment on a claim against the debt management service provider. [1983 c.17 §14; 2009 c.604 §12]

ORS 697.732 Examinations

investigations
costs
access
public disclosure requirements and exemptions

(1)To enforce the provisions of ORS 697.612 (Registration requirement) and 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider), the Director of the Department of Consumer and Business Services may: (a)Examine a debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) and the debt management service provider’s or the person’s accounts for the purpose of investigating a violation of ORS 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider). (b)Undertake an investigation, including an investigation outside this state, that the director considers necessary to: (A)Determine whether a debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) violated, is violating or is about to violate ORS 697.612 (Registration requirement) or 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) or a rule the director adopted under ORS 697.632 (Registration procedure); or (B)Aid in enforcing the provisions of ORS 697.612 (Registration requirement) and 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) and in formulating rules for adoption under ORS 697.632 (Registration procedure). (c)Require a debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) to file a written statement, under oath or otherwise, that addresses a matter the director is investigating. (d)Administer oaths and affirmations, subpoena witnesses, compel the witnesses to attend, take evidence and require a person that the director is investigating to produce books, papers, correspondence, memoranda, agreements or other documents or records that the director deems relevant or material to the investigation. A witness who appears before the director under a subpoena shall receive the fees and mileage described in ORS 44.415 (Fees and mileage of witnesses) (2). (e)Charge and require a debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) to pay for the reasonable cost of an examination or investigation conducted under this section in an amount the director specifies. (2)If a person does not comply with a subpoena that the director issues under this section, a circuit court in this state upon the director’s application shall begin contempt proceedings to compel compliance in the same manner in which the court would compel compliance with a subpoena in a civil action. (3)A debt management service provider or a person required to obtain a registration as a debt management service provider under ORS 697.612 (Registration requirement) shall provide the director for the purpose of investigating a violation of ORS 697.612 (Registration requirement) or 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) with free access to the debt management service provider’s or the person’s offices, places of business, books, accounts, records, papers, files, safes and vaults. (4)(a) The director shall maintain for public inspection a record of any order the director issued that: (A)Suspended, revoked or refused to renew a person’s registration as a debt management service provider; or (B)Imposed a civil penalty under ORS 697.832 (Civil penalties). (b)The record that the director maintains of the director’s order shall show: (A)The form of the order that the director issued; (B)The name of the person that is the subject of the order; and (C)The grounds for the action that the director took in the order. (c)The director shall maintain as a public record any notice or other information that indicates that a collection on a deposit or on the bond required under ORS 697.642 (Bond requirement) has occurred. (d)Except as provided in this subsection, records, reports and other information that the director receives or compiles as a result of an investigation conducted under this section are exempt from the disclosure required under ORS 192.314 (Right to inspect public records). [1983 c.17 §15; 2005 c.338 §17; 2009 c.604 §13]

ORS 697.752 Grounds for denial, revocation or suspension of registration

The Director of the Department of Consumer and Business Services may deny, suspend, condition, revoke or refuse to issue or renew a registration as a debt management service provider if the director determines that an applicant or debt management service provider: (1)Cannot meet financial obligations as the obligations mature, has liabilities that exceed assets or is in a financial condition that prevents the applicant or debt management service provider from continuing in business with safety to consumers; (2)Engaged in dishonest, fraudulent or illegal practices or conduct in a business or profession, or unfair or unethical practices or conduct in connection with a debt management service; (3)Filed, knowingly or negligently, false or untruthful information with the director under ORS 697.632 (Registration procedure); (4)Violated a provision of ORS 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) or a rule the director adopted under ORS 697.632 (Registration procedure); (5)Filed an application for registration that on the date the director issued a registration or on the date the director denied, suspended, conditioned or revoked a registration was incomplete in a material respect or contained a statement that was false or misleading with respect to a material fact in light of the circumstances in which the applicant or debt management service provider made the statement; (6)Failed to account to interested persons for money or property the applicant or debt management service provider received; (7)Was temporarily or permanently enjoined from engaging in or continuing a conduct or practice involving a debt management service by a court of competent jurisdiction; (8)Is subject to a director’s order that denied, suspended, conditioned or revoked a registration as a debt management service provider, or a license or registration that the director issued under another provision of law; (9)Is subject to a cease and desist order that the director entered within the previous five years after giving the applicant or debt management service provider notice and an opportunity for a hearing; (10)Demonstrated negligence or incompetence in performing a debt management service or an act, the performance of which requires the applicant or debt management service provider to obtain a registration or license; (11)Failed to supervise diligently and control an employee’s or agent’s actions related to a debt management service that the applicant or debt management service provider performed; (12)Was convicted of a felony or of a misdemeanor for which an essential element is fraud, either as an individual that is subject to the requirement to register as a debt management service provider or as a member, partner, officer, director or principal of an applicant or debt management service provider; (13)Reduced the amount of the bond required under ORS 697.642 (Bond requirement) or allowed the bond to lapse; (14)Knowingly made a false entry in a consumer’s record; or (15)Knowingly mutilated, destroyed or otherwise disposed of a consumer’s record unless the record concerns a consumer that no longer receives a debt management service from the applicant or debt management service provider or the record is not subject to the retention requirement set forth in ORS 697.672 (Requirement to make, keep and maintain records). [1983 c.17 §16; 1989 c.209 §3; 2005 c.338 §18; 2009 c.604 §14]

ORS 697.762 Enjoining violations

attorney fees
damages

(1)If the Director of the Department of Consumer and Business Services determines that a person has engaged in, is engaging in or is about to engage in an act or practice that the director believes is in violation of ORS 697.612 (Registration requirement), 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) or 697.752 (Grounds for denial, revocation or suspension of registration), in addition to actions the director may take under ORS 697.752 (Grounds for denial, revocation or suspension of registration) the director may bring suit in the name of the State of Oregon in a circuit court of this state to enjoin the act or practice. Upon a proper showing, the court shall grant a permanent or temporary injunction or restraining order and may appoint a receiver or conservator for the defendant or the defendant’s assets. The court may not require the director to post a bond. The court may award reasonable attorney fees to the director if the director prevails in an action under this section. The court may award reasonable attorney fees to a defendant if the defendant prevails in an action under this section and the court determines that the director did not have an objectively reasonable basis for asserting the claim or a reasonable basis for appealing an adverse decision of the trial court. (2)The director may include in a suit authorized by subsection (1) of this section a claim for damages on behalf of a person injured by an act or practice against which the director sought an injunction or restraining order. The court may award appropriate relief to the person if the court finds that enforcing the person’s right by private civil action or suit, whether by class action or otherwise, would be so burdensome or expensive as to be impracticable. [1983 c.17 §18; 1995 c.696 §46; 2005 c.338 §19; 2009 c.604 §15]

ORS 697.822 Remedy not exclusive

The remedy provided for in ORS 697.718 (Liability for consumer’s ascertainable loss):

Is in addition to and not exclusive of other remedies provided by law.
Does not limit a person’s statutory or common-law right to bring an action in any court for an act of a debt management service provider, or the right of the state to punish a person for violating a law. [1983 c.17 §24; 2009 c.604 §16]

ORS 697.825 Enforcement

orders

(1)The Director of the Department of Consumer and Business Services may, if the director has reason to believe that a person: (a)Violated, is violating or is about to violate ORS 697.612 (Registration requirement), 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) or 697.752 (Grounds for denial, revocation or suspension of registration), a rule adopted under ORS 697.632 (Registration procedure) or an order issued under ORS 697.652 (Written agreement and budget analysis requirement) or 697.732 (Examinations), issue an order to cease and desist from the violation. (b)Filed information under ORS 697.632 (Registration procedure) that is false or untruthful, issue an order to correct the filing. (c)Failed to maintain in effect the bond required under ORS 697.642 (Bond requirement), issue an order to remedy the failure. (2) (a) The director shall serve an order under this section on the person named in the order. (b)An order issued under this section becomes effective upon service on the person named in the order. (c)ORS 183.413 (Notice to parties before hearing of rights and procedure) to 183.470 (Orders in contested cases) apply to an order issued under this section. (d)Notwithstanding paragraph (c) of this subsection, a person may not obtain a hearing on the order unless the person requests the hearing in writing within 20 days after service of the order. (e)A person who does not request a contested case hearing may not obtain judicial review of the order. (f)The director may vacate or modify an order issued under this section. A modified order is effective upon service on the person named in the order. (3)The authority conferred by this section is in addition to and not in lieu of any other authority conferred on the director. [2005 c.338 §15; 2009 c.604 §17]

ORS 697.832 Civil penalties

In addition to any other liability or penalty provided by law, the Director of the Department of Consumer and Business Services may impose a civil penalty on a person in an amount not to exceed $5,000 for each violation of ORS 697.612 (Registration requirement) or 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider), rules adopted under ORS 697.632 (Registration procedure) or order issued under ORS 697.825 (Enforcement).
(2)The director shall impose a civil penalty on a person under this section in the manner provided in ORS 183.745 (Civil penalty procedures).
(3)Notwithstanding ORS 183.745 (Civil penalty procedures), the person to whom the notice is addressed has 10 days from the date on which the notice was mailed in which to apply for a hearing before the director.
(4)Paying or tendering payment for a civil penalty imposed under this section does not relieve a person from the obligation to comply with the applicable statute or rule.
(5)All penalties recovered under this section shall be paid into the State Treasury and credited to the General Fund and are available for general governmental expenses. [1983 c.17 §24a; 1989 c.706 §25; 1991 c.734 §88; 2005 c.338 §20; 2009 c.604 §18]

ORS 697.840 Rules

The Director of the Department of Consumer and Business Services may adopt, amend and repeal rules that are necessary to carry out the provisions of ORS 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). [2009 c.604 §21]

ORS 697.842 Disposition of moneys received by director

All moneys received by the Director of the Department of Consumer and Business Services or the department under ORS 697.005 (Definitions for ORS 697.005 to 697.095) to 697.095 (Civil penalties) or 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director), excepting any penalties received under ORS 697.832 (Civil penalties), shall be paid into the State Treasury, deposited in the Consumer and Business Services Fund created by ORS 705.145 (Consumer and Business Services Fund) and used exclusively for the purposes of ORS 697.005 (Definitions for ORS 697.005 to 697.095) to 697.095 (Civil penalties) and 697.602 (Definitions for ORS 697.602 to 697.842) to 697.842 (Disposition of moneys received by director). [1983 c.17 §25; 1987 c.373 §46; 2001 c.319 §§5,6]

ORS 697.990 Penalties

(1)Violation of ORS 697.015 (Registration requirement) or 697.058 (Agency records) by an individual is a Class A violation. (2)Violation of ORS 697.015 (Registration requirement) or 697.058 (Agency records) by a corporation or association is a Class A violation. Any officer or agent of a corporation or association who personally participates in any violation of ORS 697.015 (Registration requirement) or 697.058 (Agency records) by the corporation or association is subject to the penalty prescribed in subsection (1) of this section. (3)Violation of ORS 697.612 (Registration requirement) or 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider) is punishable, upon conviction, as a Class A misdemeanor. [Amended by 1959 c.525 §35; subsection (1) derived from subsection (1) of 697.990 (Penalties) (1957 Replacement Part) and subsection (1) of 1959 c.635 §37; subsection (2) derived from subsection (2) of 697.990 (Penalties) (1957 Replacement Part) and subsection (2) of 1959 c.635 §37; subsection (3) derived from subsection (3) of 1959 c.635 §37; 1981 c.85 §14; 1983 c.17 §31; subsection (3) enacted as 1983 c.17 §26; 1983 c.69 §6; 1999 c.1051 §219; 2005 c.338 §21]

ORS 697.992 Jurisdiction of courts

Justice courts have concurrent jurisdiction with circuit courts in all criminal prosecutions for violation of ORS 697.015 (Registration requirement), 697.058 (Agency records), 697.612 (Registration requirement) and 697.642 (Bond requirement) to 697.702 (Interference with records of debt management service provider). [Derived from 697.480 (1957 Replacement Part) and 1959 c.635 §36; 1983 c.17 §32; 1995 c.622 §10; 2005 c.338 §22]

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