Payday Loans and Cash Advance in Oklahoma

Payday repealed 2020; small loans at 17% monthly. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Oklahoma.

Is a Cash Advance Legal in Oklahoma?

The classic payday loan is gone in Oklahoma, but high-cost short-term credit is not. Senate Bill 720 of 2019 created the Oklahoma Small Lenders Act, 59 O.S. 3150 and following, and wound down the Deferred Deposit Lending Act that had allowed $15 per $100 payday loans since 2003. Under 59 O.S. 3101.1, no new deferred deposit loan could be made on or after August 1, 2020, and every deferred deposit license expired that day. What replaced it is a small loan: unsecured, 60 days to 12 months long, fully amortized in substantially equal payments, with no prepayment penalty. 59 O.S. 3150.10 lets a licensee charge a periodic interest rate of up to 17 percent a month, which is 204 percent a year, on a total of no more than $1,500 in principal across all lenders. A lender may not make the loan if the scheduled payments in a month would exceed 20 percent of your gross monthly income, and it must check a statewide database to enforce the $1,500 cap. You can rescind by the close of business the next day. The Department of Consumer Credit licenses small lenders, including online lenders, and takes complaints.

The governing law is Oklahoma Small Lenders Act, 59 O.S. 3150 to 3150.27, and 59 O.S. 3101.1 (termination of deferred deposit lending) (59 O.S. 3101.1, 3150.1, 3150.2, 3150.10, 3150.11, 3150.12, 3150.27).

Loan Limits and Terms in Oklahoma

Oklahoma replaced a fee-per-loan product with a rate-per-month product. Seventeen percent a month sounds smaller than $15 per $100, but over a year it is 204 percent, and because the minimum term is 60 days the borrower always pays at least two months of it. The loan must be unsecured and amortized in substantially equal payments, so each payment reduces principal and there is nothing to roll over. The 20 percent of gross monthly income test in 3150.10(D) is a hard limit the lender must document with proof of income. A loan may not choose another state's law or move venue out of Oklahoma, and employers cannot be forced to garnish wages for a small loan debt under 59 O.S. 3150.27.

What a $300 Loan Costs in Oklahoma

A two-week loan is not legal under the Small Lenders Act, so this uses the 60-day minimum term in 59 O.S. 3150.1 and the maximum periodic rate of 17 percent a month in 59 O.S. 3150.10(B). A $300 loan amortized in two equal monthly payments at 17 percent a month has payments of about $189.25 each, $378.50 in total, so the interest is $78.50. APR by the site formula = 78.50 / 300 x 365 / 60 = 1.59, about 159 percent. The nominal annual rate on the contract is 17 percent x 12 = 204 percent, and the Regulation Z APR disclosed to you will be close to that figure because the balance declines with each payment.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Oklahoma

• Since August 1, 2020 no person may make small loans in Oklahoma without a license from the Department of Consumer Credit, and a company that induces an Oklahoma resident to borrow by phone, fax or internet is lending in the state (59 O.S. 3150.2).
• The periodic interest rate may not exceed 17 percent a month, total principal across all lenders may not exceed $1,500, and the only other charges allowed are a $25 returned payment fee and a capped attorney fee after default (59 O.S. 3150.10).
• A lender may not make a small loan if the scheduled payments coming due in a month would exceed 20 percent of your gross monthly income, and it must keep documentation of the income it relied on (59 O.S. 3150.10(D)).
• Every small loan must give you a right of rescission running at least until the close of business on the day after the proceeds are paid out, and must tell you how to complain to the Administrator (59 O.S. 3150.11).
• The loan must be unsecured, repayable in substantially equal payments over 60 days to 12 months, and prepayable in whole or in part at any time without penalty (59 O.S. 3150.1, 3150.11).
• A licensee must comply with Regulation Z, the Equal Credit Opportunity Act and the Fair Debt Collection Practices Act, and may not write a contract that applies another state's law or moves venue out of Oklahoma (59 O.S. 3150.12).
• Deferred deposit lenders could collect loans made before August 1, 2020, but no new deferred deposit loan could be made after that date and all of those licenses expired (59 O.S. 3101.1).

Complaints and licence checks go to the Oklahoma Department of Consumer Credit: 405-521-3653, oklahoma.gov/okdocc.html, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Oklahoma

The Small Lenders Act was written with websites in mind. 59 O.S. 3150.2 says a person is engaged in the business of making small loans in Oklahoma if it regularly makes loans for a fee or induces a consumer located in the state to enter into a small loan through facsimile, telephone, internet or other means, and it requires a separate license for each location. A licensed online lender is bound by the same 17 percent monthly cap, the $1,500 database-enforced ceiling, the income test and the rescission right as a storefront, and 59 O.S. 3150.12 voids any contract term that sends disputes to another state. Companies without the license, including out-of-state and tribal-affiliated sites, still advertise two-week payday loans to Oklahomans, a product the state ended in 2020; those loans are made outside the Act. Call the Department at 405-521-3653 to confirm whether a lender holds an Oklahoma small lender license.

Alternatives If a Payday Loan Is Not the Right Fit

Oklahoma's consumer credit code, Title 14A, which the Small Lenders Act refers to, covers other licensed consumer lenders that make longer installment loans at rates set by that code, and the Department of Consumer Credit regulates them as well. Federal credit unions can offer Payday Alternative Loans under National Credit Union Administration rules, and Oklahoma banks and credit unions offer small personal loans and overdraft lines at a fraction of 17 percent a month. A credit card cash advance, even with its fee, is far cheaper over 60 days than a small loan at the maximum rate. If you borrow under the Act, borrow the smallest amount that solves the problem and pay it off early; there is no prepayment penalty. The Act points borrowers who default to consumer credit counseling organizations approved by the Department, which the lender must list on request. Utilities, landlords and medical providers will often put a bill on a written payment plan, and the statewide 2-1-1 line connects Oklahomans to rent, utility and food assistance.

Compare the installment loan and payday alternative loan options before you decide.

Frequently Asked Questions

Nearby States

• TexasThe fee cap, a worked example and the regulator to call in Texas.
• KansasThe fee cap, a worked example and the regulator to call in Kansas.
• ArkansasThe fee cap, a worked example and the regulator to call in Arkansas.
• MissouriThe fee cap, a worked example and the regulator to call in Missouri.
• New MexicoThe fee cap, a worked example and the regulator to call in New Mexico.
• ColoradoThe fee cap, a worked example and the regulator to call in Colorado.