>$300 = $10 for every additional $100
Payday lending is legal in Oklahoma.
In the state of Oklahoma, the maximum payday loan amount should not exceed $500. The loan can be given for the term from 12 days to 45 days. Average APR for a $300 payday loan is 395%*. Finance charges for loans smaller than $300 should not exceed $15, for loans larger than $300 can include $10 for each $100. Criminal actions are prohibited. Roll-overs and extensions are not allowed. A cooling-off period of 2 business days is required after the 5th consecutive loan.
Oklahoma has had the same payday loan regulations for years. It can be called restrictive in a certain way, however, it doesn’t stop lenders from charging ~390% APR. Also, despite the recent Legislature’s success in banning the attempt to pass a law that would introduce another high-cost loan product in Oklahoma, there are still problems, and the major one of them involves online tribal lending.
Oklahoma Payday Lending Statutes
It is allowed for payday lending companies to function in Oklahoma according to Okla. Stat. Tit. 59 3101 et seq. (Oklahoma Deferred Deposit Lending Act) and under the Deferred Presentment Service Act. Payday loans are officially called “deferred deposit loans” in Oklahoma.
Before starting to offer payday loans in Oklahoma, every lending company should apply for the deferred deposit lender license which is given by the Administration of the Department of Consumer Credit. If a company wants to spread into new areas or establish a new office, it needs to get a new license for each place.
Oklahoma Deferred Deposit Lending Act also requires that lenders should use the
Loan Amount in Oklahoma
- The maximum amount of all outstanding payday loans is $500.
- Only 2 loans may be taken out at any one time.
Rates, fees and other charges in Oklahoma
- Finance charges should not exceed 15% on the payday loans less than $300. An additional $10 fee per $100 can be charged on loans from $300 to $500.
Real APR for payday loans in Oklahoma can reach 395% (*According to the Center for Responsible Lending 2019: “Typical APR based on
Maximum term for a payday in Oklahoma
- Payday loans in Oklahoma can be taken for a period of 12 to 45 days.
“Not less than 12 days or more than 45 days from the date the instrument is accepted by the lender”. (Okla. Stat. Tit. 59 3101 et seq.)
- There are no renewals allowed and no rollovers.
- It is necessary that a cooling-off period of 2 business days after the 5th consecutive loan repaid passed before a person could apply for a new loan.
- There is a $25 NSF fee allowed; all criminal actions are prohibited.
More information about payday loans and their regulations in Oklahoma can be found on the website of the Department of Consumer Credit of Oklahoma.
The History of Payday Loans in Oklahoma
- 2003 – The Oklahoma Legislature authorized payday lending. According to the Oklahoma Deferred Deposit Lending Act (2003, amended in 2004), 2 outstanding payday loans at time are allowed for 12 – 45 days with the maximum total amount of $500. Basically, all the loan terms stayed more or less the same for years.
- July 1, 2004 – All licensed payday lenders must record every Oklahoma payday loan in the Oklahoma Department of Consumer Credit database and check it every time before issuing new loans.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Oklahoma is now allowed to offer loans to the military in excess of 36% APR.
- However, the Demographics of Payday Lending in Oklahoma report found out some years later after the MLA came into effect that “most of the payday lenders (199 out of 324) in Oklahoma are located within 10-mile radius of military installations and base.” And this is definitely saying something about the law-abiding nature of Oklahoma payday lenders, we assume.
- 2013 – There were 358 licensed payday lending stores in Oklahoma according to the Center for Responsible Lending report.
- June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (the federal rule is expected in November 2020).
- 2016 – More and more online lenders appear in Oklahoma, offering high-cost financial products. The state regulators tried to impose more restrictive laws over the years but to no avail.
- 2017 – Yet, they managed to stop some of the “beneficial” high-cost products from appearing in Oklahoma. There was an unsuccessful attempt on the part of the lenders to add “installment loans” to Oklahoma market ($1,500 maximum amount, a 12-month term, 17% monthly interest). However, Governor Mary Fallin put a veto on HB 1913.
- 2019 – Currently, the legislation with regard to payday loans in the state of Oklahoma is likely to stay the same. Also, it is unlikely that it will ever become more restrictive from the inside (not as a result of a federal rule) taking into account the fact that the payday loan industry in Oklahoma has done everything possible to interfere with every restrictive reform in the past 15 years.
- Plus, Oklahoma has 77 counties with 39 Native American reservations. These figures mean that tribal payday lending schemes are more present here that in any other state.
(As of April 2019)