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Wednesday, August 15, 2012

Payday Lending in Oklahoma


The Pew Charitable Trusts released a new series Payday Lending in America as a part of the Safe Small-Dollar Loans Research Project, Pew surveyed payday loan borrowers nationwide about their usage, as well as other options they would use if payday loans were unavailable. The findings present new data on borrowers and challenge the conventional wisdom surrounding payday loan usage. This research is intended to help policy makers consider the best ways to ensure a safe and transparent marketplace for small-dollar loans.

Good news:  Payday lending restrictions are not leading to increased online borrowing.
Bad news:  Most borrowers use payday loans to cover ordinary living expenses, not unexpected emergencies.

What's going on with Payday Lending in America?
Take a quiz on this page


Pew classifies Oklahoma as one of the nation's 28 "permissive" states which allow single-repayment loans with APR's of 391 % or higher.  Oklahoma is one of 4 "permissive" states with usage rates of 10% and above and Oklahoma has the highest usage rate for payday loans - 13%.  This loan usage rate was based on survey interviews which included storefront, online and other types of payday borrowing. 

Oklahoma's regulation of payday lenders began in 2003 with the Deferred Deposit Lending Act.  Loans are limited to $500, exclusive of the finance charge. 
You have the right to change your mind and not take the load no later that 5:00 p.m. of the next business day following the loan transaction, but
  • You must return the full amount of the principal the lender advanced you
  • and give written notice to the lender at the address on the agreement you signed or at the location you made the loan. 
Other provisions of the act:
  • Repayment periods can range from not less than 12 days to up to 45 days from the initial contract acceptance by the lender. 
  • Maximum finance charges are set out by statute. Here's a rate chart from the Oklahoma Department of Consumer Credit
  • You can be charged an additional fee for a bounced check. 
  • A borrower cannot 'renew' the loan by paying the finance charge or pay off a previous loan with the proceeds of a loan from another lender. 
  • A borrower can take out a consecutive loan but with restrictions.
  • You have a right to request an installment repayment after a third consecutive loan.  This comes with an additional processing fee and limits additional deferred loans.
  • The act requires certain types of lenders to be licensed annually, including licensing of each site at which these loans are made. 

Not all payday lenders are required to be licensed under this statute.  For example, banks, credit unions, pawn shops are regulated under the Oklahoma Department of Consumer Credit. Click on this link for a list as of July 27, 2012, of all currently regulated industry rosters, including Deferred Deposit Lenders in and outside Oklahoma


The Deferred Deposit Lending Act is enforced by the Oklahoma Department of Consumer Credit. 

If you believe a payday lender is violating the provisions of the act or has violated the law, you can:
  • Call the Department of Consumer Credit Hotline:  800-448-4904 or 405-521-3653
  • print the online form to mail in with copies of documents to support your complaint
  • fill out the form online and mail information or documents that support your complaint to the Department of Consumer Credit.
You can find more information about the law, licensed Deferred Deposit Lenders, and current enforcement actions online at http://www.ok.gov/okdocc/.

To get a list of debt and credit counseling agencies call 1-800-448-4904

go to http://www.oklaw.org

For more information about consumer and debt collection problems go to OKLaw.org  and click on Consumer and Debt