Oklahoma Credit Services Organization Bond: A Comprehensive Guide

August 9, 2021

This guide provides information for insurance agents to help their customers obtain Oklahoma Credit Services Organization Bonds

At a Glance:

• Average Cost: $100 per year
• Bond Amount: $10,000
• Who Needs it: All credit service organizations operating in Oklahoma
• Purpose: To ensure the public will receive compensation for any damages should the credit service organization violate licensing law
• Who Regulates Credit Services Organizations In Oklahoma: The Oklahoma Department of Consumer Credit

Background

Oklahoma statute 160:30-3 requires all credit services organizations operating in the state to obtain a license with the Department of Consumer Credit. The Oklahoma legislature enacted the licensing laws and regulations to ensure that credit services organizations engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, credit services organizations must purchase and maintain a $10,000 surety bond to be eligible for licensure.

What is the Purpose of the Oklahoma Credit Services Organization Bond?

Oklahoma requires credit services organizations to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the credit services organization fails to comply with the regulations set forth in Oklahoma code 160:30. Specifically, the bond protects the public in the event the credit services organization engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the credit services organization breaks licensing laws.

How Can an Insurance Agent Obtain an Oklahoma Credit Services Organization Surety Bond?

BondExchange makes obtaining an Oklahoma Credit Service Organization Bond easy. Simply login to your account and use our keyword search to find the “credit” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Oklahoma Credit Services Organization Bond?

No, a credit check is not required for the Oklahoma Credit Services Organization Bond. Because the bond is considered relatively low risk, the same rate is offered to all credit services organizations regardless of their credit history.

How Much Does the Oklahoma Credit Service Organization Bond Cost?

The Oklahoma credit service organization bond costs just $100 per year.

How Does Oklahoma Define “Credit Service Organization?”

Oklahoma statute 132 defines a credit service organization as any business entity who provides one or more of the following services:

• Improves a buyer’s credit record, history, or rating
• Obtaining an extension of credit for a buyer
• Provides advice or assistance in regards to credit issues

Exemptions to this definition include:

• Entities authorized to make loans or extensions of credit
• Banks and other similar financial institutions
• Non-profit organizations
• Licensed real estate brokers
• Licensed attorneys
• Broker-dealers registered with the Securities and Exchange Commission or the Commodities Futures Trading Commission
• Consumer reporting agencies
• Anyone authorized to file electronic tax returns
• Residential mortgage brokers
• Insurance companies

How Do Credit Services Organizations Apply for a License in Oklahoma

Credit services organizations in Oklahoma must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.

License Period – The Oklahoma Credit Services Organization license expires on January 1 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Credit services organizations must purchase and maintain a $10,000 surety bond

Step 2 – Establish a Trust Account

Credit services organizations who collect funds before providing services must open a federally insured trust account to store consumer funds. Credit services organizations who do not accept funds before providing services must submit a letter with their application explaining so.

Step 3 – Complete the Application

All Oklahoma Credit Services Organization License applications should be mailed to the following address:

Oklahoma Department of Consumer Credit
3613 NW 56th St., Suite 240
Oklahoma City, OK 73112-4512

Applicants must complete the application in its entirety, and submit the following items:

• • Company financial statements
  • Evidence of a trust account if the company accepts payment before providing full services
  • Military service verification (if applicable)
  • Company formation documents

Credit services organizations must pay the following fees when submitting their license application:

• • $300 investigation fee
  • $200 license fee
  • $400 examination fee

How Do Oklahoma Credit Service Organizations Renew Their License?

Credit service organizations should mail their completed renewal application, including a $600 fee, to the following address:

Oklahoma Department of Consumer Credit
3613 NW 56th St., Suite 240
Oklahoma City, OK 73112-4512

The Oklahoma Credit Services Organization license expires on January 1 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Oklahoma Credit Services Organization License?

Oklahoma does not require credit services organizations to purchase any form of liability insurance as a prerequisite to obtaining a business license. Credit services organizations must purchase and maintain a $10,000 surety bond.

How Do Oklahoma Credit Services Organizations File Their Bond?

Credit services organizations should mail the completed bond form, including the power of attorney, to the following address:

Oklahoma Department of Consumer Credit
3613 NW 56th St., Suite 240
Oklahoma City, OK 73112-4512

The credit services organization surety bond requires signatures from both the surety company that issues the bond and a representative from the credit services organization. The surety company should include the following information on the bond form:

• Legal name and address of entity/individual(s) buying the bond
• Surety company’s name and state of incorporation
• Date the bond is signed

What Can Oklahoma Credit Services Organizations Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, credit services organizations in Oklahoma must ensure that they follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not engage in any acts of fraud
• Do not breach any contracts made with consumers

What Other Insurance Products Can Agents Offer Credit Services Organizations in Oklahoma?

Oklahoma does not require credit services organizations to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Oklahoma Credit Services Organization Customers?

Oklahoma conveniently provides a public database to search for active credit services organizations in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.