73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 363
 
                         House Bill 2153
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor Theodore R.
  Kulongoski for Department of Consumer and Business Services)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Modifies reference to federal publication used to determine
rate of interest paid to borrower on lender security protection
deposit.
 
                        A BILL FOR AN ACT
Relating to lender security protection deposits; creating new
  provisions; and amending ORS 86.245.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 86.245 is amended to read:
  86.245.   { - (1) Except as provided in subsections (5) and (7)
of this section, any lender who requires a lender's security
protection provision in connection with a real estate loan
agreement shall pay interest to the borrower on funds deposited
in the account at a rate not less than the discount rate. - }
    { - (2) - }   { + (1) + } As used in this section, 'discount
rate' means the auction average rate on   { - three-month - }
 { + 91-day + } United States Treasury bills, as established by
the most recent auction of such Treasury bills,   { - as reported
in the Federal Reserve's Statistical Release H.15 - }  { +  as
published by the United States Department of the Treasury, Bureau
of the Public Debt + }, less 100 basis points.   { - The discount
rate shall be determined with reference to the most recent
auction date before May 15 and November 15 each year, beginning
November 15, 1995. - }
   { +  (2) Except as provided in subsections (5) and (7) of this
section, any lender who requires a lender's security protection
provision in connection with a real estate loan agreement shall
pay interest to the borrower on funds deposited in the account at
a rate not less than the discount rate. The discount rate shall
be determined with reference to the most recent auction date
before May 15 and November 15 each year. + }
  (3) The rate of interest payable on the account shall be
adjusted semiannually to reflect changes in the discount rate.
These adjustments shall be calculated on May 15 and November 15
each year. Adjustments calculated on May 15 shall take effect on
the following July 1, and adjustments calculated on November 15
shall take effect on the following January 1.
  (4) Interest shall be computed on the average monthly balance
in the account and shall be paid not less than quarterly to the
borrower by crediting to the escrow account the amount of the
interest due.
  (5) Except as provided in subsection (6) of this section, this
section   { - shall - }   { + does + } not apply to real estate
loan agreements entered into prior to September 1, 1975, or on
which the payment of interest on a lender's security protection
provision violates any state or federal law or regulation.
  (6) If federal law or regulation does not prohibit the payment
of interest on a lender's security protection provision by
federally chartered or organized lenders,   { - then - }  this
section
  { - shall apply - }   { + applies + } to the federally
chartered or organized lenders and the state chartered or
organized lenders that are similar to the federally chartered or
organized lenders with respect to a lender's security protection
provision executed in connection with real estate loan agreement
entered into prior to and in existence on September 1, 1975.
  (7) This section   { - shall - }   { + does + } not apply to
real estate loan agreements   { - which are made by the State of
Oregon or are - }  made by,
  { - or - }  held for sale to  { - , - }  or sold to  { - , - }
the State of Oregon.
  SECTION 2.  { + The amendments to ORS 86.245 by section 1 of
this 2005 Act apply to lender security protection accounts
established prior to, on or after the effective date of this 2005
Act. + }
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