Oklahoma Supervised Lender Bond: A Comprehensive Guide
August 10, 2021
This guide provides information for insurance agents to help their customers obtain Oklahoma Supervised Lender Bonds
At a Glance:
- Average Cost: Between 0.5% to 5% of the bond amount per year based on the applicant’s credit
- Bond Amount: $5,000 plus an additional $1,000 per branch location
- Who Needs it: All supervised lenders operating in Oklahoma
- Purpose: To ensure the public will receive compensation for any damages should the supervised lender violate licensing law
- Who Regulates Supervised Lenders In Oklahoma: The Oklahoma Department of Consumer Credit
Background
Oklahoma statute 14A-3-502 requires all supervised lenders 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 supervised lenders engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, supervised lenders must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the Oklahoma Supervised Lender Bond?
Oklahoma requires supervised lenders 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 supervised lender fails to comply with the regulations set forth in Oklahoma statute 14A-3-503. Specifically, the bond protects the public in the event the supervised lender 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 small loan lender breaks licensing laws.
How Can an Insurance Agent Obtain an Oklahoma Supervised Lender Surety Bond?
BondExchange makes obtaining an Oklahoma Supervised Lender Bond easy. Simply login to your account and use our keyword search to find the “supervised” 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 Supervised Lender Bond?
Surety companies will run a credit check on the owners of the supervised lending company to determine eligibility and pricing for the Oklahoma Supervised Lender bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Oklahoma Supervised Lender Bond Cost?
The Oklahoma Supervised Lender Bond can cost anywhere between 0.5% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $5,000 bond requirement.
$5,000 Supervised Lender Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 600+ | $100 |
| 550 – 599 | $200 |
| 500 – 549 | $250 |
How Does Oklahoma Define “Supervised Lender?”
Oklahoma statute 14A-3-501 describes a supervised lender as any business entity who issues loans in which the rate of the loan finance charge exceeds 10% per year.
How Do Supervised Lenders Apply for a License in Oklahoma
Supervised lenders 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 supervised lender license expires on January 1 of every year and must be renewed before the expiration date
Step 1 – Meet the Net Assets Requirement
Applicants for the Oklahoma Supervised Lender License must maintain a minimum company net assets (assets – liabilities) of at least $25,000. Applicants must submit a financial statement verifying their net worth with their license application.
Step 2 – Purchase a Surety Bond
Supervised lenders must purchase and maintain a surety bond with a limit of $5,000 plus an additional $1,000 per branch location
Step 3 – Complete the Application
All Oklahoma Supervised Lender License applications should be mailed to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
Supervised lenders must complete the application in its entirety, and submit the following items:
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- Company financial statements indicating net assets of at least $25,000
- Military service verification (if applicable)
- Company formation documents
- Record keeping and location of application forms (see the application form for specific requirements)
All supervised lenders are required to pay a $1,215 fee when submitting their license application.
How Do Oklahoma Supervised Lenders Renew Their License?
Supervised lenders should mail their completed renewal application, including a $790 fee, to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
The Oklahoma supervised lender license expires on January 1 of every year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Oklahoma Supervised Lender License?
Oklahoma does not require supervised lenders to purchase any form of liability insurance as a prerequisite to obtaining a business license. Supervised lenders must purchase and maintain a surety bond with a limit of $5,000 plus an additional $1,000 per branch location.
How Do Oklahoma Supervised Lenders File Their Bond?
Supervised lenders should mail the completed bond form, including the power of attorney, to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
The supervised lender surety bond requires signatures from both the surety company that issues the bond and a representative from the lending company. 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
- Bond amount
- Date the bond is signed
What Can Oklahoma Supervised Lenders Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, supervised lenders 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 Supervised Lenders in Oklahoma?
Oklahoma does not require supervised lenders 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 Supervised Lender Customers?
Oklahoma conveniently provides a public database to search for active supervised lenders 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.
