Oklahoma Governor Kevin Stitt signed a bill that will create a new credit plan for the State of Oklahoma on April 18, 2019.
The bill, known as the Small Lenders Act (SLA), includes a surety bond requirement for applicants for a license to make small loans.
Those who have been licensed under the previous Oklahoma Deferred Deposit Lending Act must apply for a new license under the Small Lenders Act and must conform to all the license requirements of the current Act as well.
What is an Oklahoma Small Lenders Bond?
It is a financial guarantee provided by the person licensed to offer small loans pursuant to the Small Lenders Act and the Surety who will issue the bond.
This bond is a legal agreement among three parties:
- Principal – Person licensed to offer small loans
- Obligee – Oklahoma Department of Consumer Credit
- Surety – Surety bond company who will issue the bond. A surety should be an insurer who is regulated under the Oklahoma Insurance Commissioner and must not be affiliated with the applicant.
Through this bond, the Surety is assuring the Oklahoma Department of Consumer Credit that the license applicant will perform all the duties that are required of him or her by the (SLA).
The bond will be payable to the Oklahoma Department of Consumer Credit, and will be for the benefit of any person who is injured pursuant to a small loan through the following:
- Breach of contract
- Financial failure
- Violation of any provision of the SLA by a licensee
How much does an Oklahoma Small Lenders Bond cost?
The bond amount, according to Section 7 of the SLA, is $25,000 per location.
However, the aggregate amount of the surety bond required for a single licensee should not be more than $200,000.
A license applicant’s exact bond amount will be determined by the Oklahoma Department of Consumer Credit.
A license applicant doesn’t need to pay the full bond amount when obtaining a surety bond. Only a small percentage of it will be paid to the surety as the bond premium.
A license applicant’s bond premium will depend on his or her credit score. Applicants who have excellent credit scores will be eligible to pay just 1% of the bond amount.
It is important to note that the aggregate liability of the surety bond will not exceed the principal sum of the surety bond.
The surety bond should be valid for not less than 3 years even after the licensee’s license has expired, has been revoked, or surrendered.
How to get an Oklahoma Small Lenders Bond
We have created a secure, fast, and easy online surety bond application.