Oklahoma Amends Uniform Consumer Credit Code
by: Lee Greenberg, Esq.
The state of Oklahoma recently amended several provisions of the Uniform Consumer Credit Code through the enactment of House Bill 1829. The new law has an effective date of July 1, 2013; however, the amendments are effective immediately under an emergency clause.
House Bill 1829 updates the Uniform Consumer Credit Code to be in compliance with the Federal Consumer Credit Protection Act.
The new legislation requires creditors to give to the consumer both a “Minimum Payment Warning” statement and repayment information that applies to the outstanding balance of the consumer under the credit plan, if there is an outstanding balance at the end of the consumer credit billing cycle or if a loan finance charge is made with respect to the billing cycle. Repayment information must be placed in a conspicuous and prominent location on the billing statement in the form of a clear and concise table with headings. Required repayment information includes the number of months that it would take the consumer to pay the entire amount of that balance, if the consumer pays only the required minimum monthly payments and if no further advances are made; the total cost to the consumer of paying that balance in full; the monthly payment amount that would be required for the consumer to eliminate the outstanding balance in thirty-six months, if no further advances are made; and a toll-free telephone number at which the consumer may receive information about accessing credit counseling and debt management services.
In addition, the law includes many new requirements for creditors concerning credit card accounts under an open-end consumer credit plan. For instance:
- The billing statement for a plan in which a late fee may be imposed due to the failure of the obligor to make payment on or before the due date for such payment must include, in a conspicuous location, the date on which a late payment fee will be charged, as well as the amount of the fee to be imposed if the payment is made after that date. Also, if one or more late payments may result in an increase in the annual percentage rate applicable to the account, the billing statement must include conspicuous notice of such fact, together with the applicable penalty annual percentage rate.
- Creditors must provide a written notice of an increase in an annual percentage rate not later than forty-five days prior to the effective date of the increase with few exceptions; as well as a written notice of any significant change in the terms of the cardholder agreement between the creditor and the obligor not later than forty-five days prior to the effective date of the change. Such notices must be made in a clear and conspicuous manner and contain a brief statement of the right of the obligor to cancel the account before the effective date of the subject rate increase or other change.
- Creditors may not impose finance charges as a result of the loss of any time period provided by the creditor within which the obligor may repay any portion of the credit extended without incurring a finance charge.
- Over-the-limit fees may not be imposed by the creditor for any extension of credit in excess of the amount of credit authorized to be extended, unless the consumer expressly elects to permit the creditor, with respect to such account, to complete transactions involving the extension of credit under such account in excess of the amount of credit authorized.
- Creditors may not impose a separate fee to allow the obligor to repay an extension of credit or finance charge, whether such repayment is made by mail, electronic transfer, telephone authorization, or other means, unless such payment involves an expedited service by a service representative of the creditor.
- If the terms of the plan require the payment of any fees by the consumer in the first year during which the account is opened in an aggregate amount in excess of twenty-five percent of the total amount of credit authorized under the account when the account is opened, no payment of any fees may be made from the credit made available under the terms of the account. This does not apply to late fees, over-the-limit fees or fees for a payment returned for insufficient funds.
- The payment due date must be the same day each month and if the due date is a day on which the creditor does not receive or accept payments by mail, such as a weekend or holiday, then the creditor may not treat a payment received on the next business day as late for any purpose.
- Credit cards or open-end consumer credit plans may not be issued or established by or on behalf of a consumer who has not attained the age of twenty-one. However, a consumer under the age of twenty-one may be issued a credit card or establish an open-end consumer credit plan by either submitting a written application to the card issuer including the signature of a cosigner over the age of twenty-one, who has the means to repay and indicates joint liability in connection with the debts incurred by the consumer, or submitting financial information indicating an independent means of repaying any obligation arising from the extension of credit in connection with the account.
- No increase may be made in the amount of credit authorized to be extended under a credit card account for which a co-signer assumed joint liability for debts incurred by the consumer in connection with the account before the consumer attains the age of twenty-one, unless the co-signer approves in writing, and assumes joint liability for, such increases.
House Bill 1829 also created the Oklahoma Private Student Loan Transparency and Improvement Act (the “Private Student Loan Act”). The Private Student Loan Act requires a private educational lender to disclose certain information to the borrower throughout the application process and establishes a timeline for accepting a loan and disbursement of funds.
The Private Student Loan Act states that a private educational lender may not participate in the following:
- Offer or provide gifts to a covered educational institution in exchange for any advantages or consideration to the lender;
- Use the name, emblem, mascot or logo associated with the covered educational institution to market private education loans;
- Provide items of value to an employee of a covered educational institution who serves on an advisory board, commission or group established by the private lender; or
- Impose a fee for early repayment or prepayment.
About the Author:
Lee is Senior Counsel and regulatory compliance specialist at Bankers Advisory. He is a graduate of the University of Colorado at Boulder and earned his J.D. at the New England School of Law. He is admitted to the Bar in Massachusetts. He can be reached at lee@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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