OAR 441-730-0150: Consolidating Sales Financing into Direct Loans

(1) A licensee shall not make a direct loan to pay off a retail installment contract owned by or assigned to the licensee if the loan bears a higher APR than that borne by the contract unless the loan is of substantial benefit to the borrower. A substantial benefit would exist in circumstances including, but not limited to one or more of the following: (a) The retail installment contract is in default two installments or more; (b) The amount of the individual installments payable on the direct loan will be lower than the amount of the individual installment being paid on the contract; (c) The direct loan pays off one or more obligations in addition to the retail installment contract; (d) The principal amount of the direct loan exceeds the sum of the unpaid installments on the retail installment contract by not less than 20 percent of the sum of the unpaid installments, or by $200, whichever is less. (2) As used in this rule, "retail installment contract" has the meaning given the term by ORS 83.010 and 83.510.