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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
ENGROSSED SENATE
BILL NO. 796 By: Leewright of the Senate
and
McEntire of the House
An Act relating to Uniform Consumer Credit Code;
amending 14A O.S. 2011, Sections 1 -106, as last
amended by Section 1, Chapter 178, O.S.L. 2019 and 3 -
109 (14A O.S. Supp. 2020, Section 1 -106), which
relate to change in dollar amounts and definitions;
adding references; amending 14A O.S. 2011, Section 3 -
508A, as last amended by Section 1, Chapter 89,
O.S.L. 2015 (14A O.S. Supp. 2020, Section 3 -508A),
which relates to finance rate for supervised loans;
changing loan principal amounts; permitting a loan
closing fee; setting closing fee amount; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 14A O.S. 2011, Section 1 -106, as
last amended by Section 1, Chapter 178, O.S.L. 2019 (14A O.S. Supp.
2020, Section 1-106), is amended to re ad as follows:
Section 1-106. (1) From time to time the dollar amounts in
paragraphs (a), (b) and (c) of subsection (2) of Section 2 -201,
paragraph (a) of subsection (1) of Section 2 -203, subsection (1) of
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Section 2-407, Section 2-413, paragraph (b) of s ubsection (1) of
Section 3-203, Section 3-203.1, subsection (4) of Section 3 -508A,
subsection (1) of Section 3 -508B, subsection (1) of Section 3 -510,
paragraphs (a) and (b) of Section 3 -511, Section 3-514, and
subsections (2) and (3) of Section 5 -103 of the Uniform Consumer
Credit Code, are hereby designated as subject to change and shall
change, as provided in this section and the rules of the
Administrator, according to and to the extent of changes in the
Consumer Price Index for Urban Wage Earners and Cl erical Workers:
U.S. City Average, All Items, 1967=100, compiled by the Bureau of
Labor Statistics, United States Department of Labor, and hereafter
referred to as the Index. The Index for December of the year 1973
shall be deemed the Reference Base Index . The dollar amounts
established by rule of the Administrator in paragraph (e) of
subsection (1) of Section 2 -104, paragraph (b) of subsection (1) of
Section 2-106 and paragraph (d) of Section 3 -104 of the Uniform
Consumer Credit Code in effect on January 1, 1982, shall remain in
full force and effect.
(2) The designated dollar amounts shall change on July 1 of
each year if the percentage of change, calculated to the nearest
whole percentage point, between the Index at the end of the
preceding year and th e Reference Base Index is ten percent (10%) or
more, but:
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(a) the portion of the percentage change in the Index in
excess of a multiple of ten percent (10%) shall be
disregarded and the dollar amounts shall change only
in multiples of ten percent (10%) of the amounts
appearing in the Uniform Consumer Credit Code; and
(b) the dollar amounts shall not change if the amounts
required by this section are those currently in effect
pursuant to the Uniform Consumer Credit Code as a
result of earlier application of this section.
(3) If the Index is revised, the percentage of change pursuant
to this section shall be calculated on the basis of the revised
Index. If a revision of the Index changes the Reference Base Index,
a revised Reference Base Index shall be deter mined by multiplying
the Reference Base Index then applicable by the rebasing factor
furnished by the United States Bureau of Labor Statistics. If the
Index is superseded, the Index referred to in this section shall be
the one represented by the United St ates Bureau of Labor Statistics
as reflecting most accurately changes in the purchasing power of the
dollar for consumers.
(4) The rules of the Administrator shall:
(a) include the method for calculating the changes in
dollar amounts required by subsectio n (2) of this
section;
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(b) be amended in accordance with the Administrative
Procedures Act to include changes in the Index
required by subsection (3) of this section including,
if applicable, the numerical equivalent of the
Reference Base Index under a rev ised Reference Base
Index and the designation or title of any index
superseding the Index; and
(c) provide for appropriate notice to licensees and other
interested persons of any changes in the dollar
amounts which result from changes required by
subsection (2) of this section no later than April 30
of each year. Each dollar amount subject to change as
provided in this section shall be listed in an
appendix to the rules of the Administrator and shall
be published in the Oklahoma Administrative Code.
Changes to the appendix shall be submitted to the
Secretary of State prior to the annual deadline for
submitting material for publication in the Code.
Changes in the appendix shall not be construed as
rulemaking.
(5) A person does not violate the Uniform Cons umer Credit Code
with respect to a transaction otherwise complying with the Uniform
Consumer Credit Code if he or she relies on dollar amounts either
determined according to subsection (2) of this section or appearing
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in the last rule of the Administrator announcing the then current
dollar amounts.
SECTION 2. AMENDATORY 14A O.S. 2011, Section 3 -109, is
amended to read as follows:
Section 3-109.
(1) (a) "Loan finance charge" means a finance charge composed
of the sum of:
(i) all charges payable directly or indirectly by the
debtor and imposed directly or indirectly by the
lender as an incident to the extension of credit,
including any of the following types of charges,
which are applicable: interest or any amount
payable under a point, discount, or other system
of charges, however denominated, premium or other
charge for any guarantee or insurance protecting
the lender against the debtor 's default or other
credit loss; and
(ii) charges incurred for investigating the collateral
or credit worthiness of the debtor or for
commissions or brokerage for obtaining the
credit, irrespective of the person to whom the
charges are paid or payable unless the lender had
no notice of the charges when the loan was made.
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(b) The term does not include c harges as a result of
default, additional charges under Section Sections 3-
202 and subsection (4) of 3 -508A of this title,
delinquency charges under Section 3 -203 of this title,
deferral charges under Section 3 -204 of this title,
charges of a type payable in a comparable cash
transaction, or sellers points. The finance charge
shall not include fees and amounts imposed by third -
party closing agents, including settlement agents,
attorneys, and escrow and title companies, if the
creditor does not require the imposition of the
charges or the services provided and does not retain
the charges. Examples of charges which are included
in the finance charge include any of the following
types of charges which are applicable:
(i) Interest, time price differential, and any amount
payable under a point, discount, or other system
of additional charges;
(ii) Service or carrying charge;
(iii) Loan fee, finder's fee, or similar charge;
(iv) Fee for an investigation or credit report;
(v) Premium or other charge for any guaran tee or
insurance protecting the creditor against the
obligor's default or other credit loss; and
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(vi) Borrower-paid mortgage broker fees, including
fees paid directly to the broker or the lender,
for delivery to the broker, whether such fees are
paid in cash or financed.
(2) If a lender makes a loan to a debtor by purchasing or
satisfying obligations of the debtor pursuant to a lender credit
card or similar arrangement, and the purchase or satisfaction is
made at less than the face amount of the obligation , the discount is
not part of the loan finance charge.
SECTION 3. AMENDATORY 14A O.S. 2011, Section 3 -508A, as
last amended by Section 1, Chapter 89, O.S.L. 2015 (14A O.S. Supp.
2020, Section 3-508A), is amended to read as follows:
Section 3-508A. (1) With respect to a supervised loan,
including a loan pursuant to a revolving loan account, a supervised
lender may contract for and receive a loan finance charge not
exceeding that permitted by this section.
(2) The loan finance charg e, calculated according to the
actuarial method, may not exceed the equivalent of the greater of
either of the following:
(a) the total of:
(i) twenty-seven percent (27%) thirty-two percent
(32%) per year on that part of the unpaid
balances of the principa l which is Two Thousand
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Nine Hundred Ten Dollars ($2,910.00) Seven
Thousand Dollars ($7,000.00) or less;
(ii) twenty-three percent (23%) per year on that part
of the unpaid balances of the principal which is
more than Two Thousand Nine Hundred Ten Dollars
($2,910.00) Seven Thousand Dollars ($7,000.00)
but does not exceed Six Thousand Two Hundred
Dollars ($6,200.00) Eleven Thousand Dollars
($11,000.00); and
(iii) twenty percent (20%) per year on that part of
the unpaid balances of the principal which is
more than Six Thousand Two Hundred Dollars
($6,200.00) Eleven Thousand Dollars ($11,000.00) ;
or
(b) twenty-five percent (25%) per year on the unpaid
balances of the principal.
(3) This section does not limit or restrict the manner of
contracting for the loan finance charge, whether by way of add -on,
discount, or otherwise, so long as the rate of the loan finance
charge does not exceed that permitted by this section. If the loan
is precomputed:
(a) the loan finance charge may be calculated on the
assumption that all scheduled payments will be made
when due; and
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(b) the effect of prepayment is governed by the provisions
on rebate upon prepayment (Section 3 -210).
(4) In addition to the loan finance charge permitted in this
section and other charges permitted in this act, a supervised lender
may assess a lender closing fee not to exceed Twenty -eight Dollars
and eighty-five cents ($28.85) upon consummation of the loan.
(5) The term of a loan, for the purpose of this section,
commences on the date the loan is made. Differences in the lengths
of months are disregarded and a day may be counted as one -thirtieth
(1/30) of a month. Subject to classifications and differentiations
the lender may reasonably establish, a part of a month in excess of
fifteen (15) days may b e treated as a full month if periods of
fifteen (15) days or less are disregarded and if that procedure is
not consistently used to obtain a greater yield than would otherwise
be permitted.
(5) (6) Subject to classifications and differentiations the
lender may reasonably establish, he may make the same loan finance
charge on all principal amounts within a specified range. A loan
finance charge so made does not violate subsection (2) of this
section if:
(a) when applied to the median amount within each ran ge,
it does not exceed the maximum permitted in subsection
(2) of this section; and
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(b) when applied to the lowest amount within each range,
it does not produce a rate of loan finance charge
exceeding the rate calculated according to paragraph
(a) of this subsection by more than eight percent (8%)
of the rate calculated according to paragraph (a) of
this subsection.
SECTION 4. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON BANKING, FINANCIAL SERVICES AN D
PENSIONS, dated 03/29/2021 - DO PASS.