Chapter
8. Credit Services Organization Act
§ 131. Short title
This act [FN1] shall be known and may be cited as the "Credit
Services Organization Act".
[FN1] Title 24, § 131 et seq.
§ 132. Definitions
As used in the Credit Services Organization Act:
1. "Buyer" means any individual who is solicited to
purchase or who purchases the services of a credit services organization;
2. a. "Credit services organization" means any person who, with respect to the extension of credit by others, sells, provides, performs, or represents that the person can or will sell, provide, or perform, in return for the payment of money or other valuable consideration from any source, any of the following services more than twelve times in a calendar year:
(1) improving a buyer's credit record, history, or rating,
(2) obtaining an extension of credit for a buyer, or
(3) providing advice or assistance to a buyer with regard to
division (1) or (2) of this subparagraph,
b. "Credit services organization" does not include:
(1) any person authorized to make loans or extensions of credit
under the laws of this state or the United States who is subject to regulation
and supervision by this state or the United States or a lender approved by the
United States Secretary of Housing and Urban Development for participation in
any mortgage insurance program under the National Housing Act, [FN1]
(2) any bank, savings and loan institution or credit union whose
deposits or accounts are eligible for insurance by the Federal Deposit
Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or
the National Credit Union Administration or a subsidiary of such bank, savings
and loan institution or credit union,
(3) any nonprofit organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, [FN2]
(4) any person licensed as a real estate broker by this state if
the person is acting within the course and scope of that license,
(5) any person licensed to practice law in this state if the
person renders services within the course and scope of the practice of the
person as an attorney,
(6) any broker-dealer registered with the Securities and Exchange
Commission or the Commodity Futures Trading Commission if the broker-dealer is
acting within the course and scope of that regulation,
(7) any consumer reporting agency as defined in the Federal Fair
Credit Reporting Act, 15 U.S.C., Sections 1681 through 1681t,
(8) any person authorized to file electronic income tax returns
who does not receive any consideration for refund anticipation loans,
(9) any residential mortgage broker as defined in the Mortgage
Broker Licensure Act, [FN3] or
(10) any insurance company, its affiliates and subsidiaries,
authorized to do business in this state by the Insurance Commissioner,
including insurance agents licensed in this state;
3. "Extension of credit" means the right to defer
payment of debt or to incur debt and defer its payment offered or granted
primarily for personal, family, or household purposes, or to anyone whose
principal occupation is agricultural in nature; and
4. "Administrator" means the Administrator of the
Department of Consumer Credit.
[FN1] 12 U.S.C.A § 1701 et seq.
[FN2] 26 U.S.C.A. § 501(c)(3).
[FN3] Title 59, § 2081 et seq.
§ 133. Restrictions
A credit services organization, its salespersons, agents, and
representatives, and independent contractors who sell or attempt to sell the
services of a credit services organization may not do any of the following:
1. Charge or receive any
money or other valuable consideration prior to full and complete performance of
the services the credit services organization has agreed to perform for the
buyer, unless the credit services organization has obtained a surety bond of
Ten Thousand Dollars ($10,000.00) issued by a surety company admitted to do
business in this state and established a trust account at a federally insured
bank or savings and loan association located in this state;
2. Charge or receive any money or other valuable consideration
solely for referral of the buyer to a retail seller who will or may extend credit
to the buyer if the credit that is or will be extended to
the buyer is upon substantially the same terms as those available to the
general public;
3. Make or counsel or advise any buyer to make any statement that
is untrue or misleading or that should be known by the exercise of reasonable
care to be untrue or misleading, to a credit reporting agency or to any person
who has extended credit to a buyer or to whom a buyer is applying for an
extension of credit with respect to a buyer's credit worthiness, credit
standing, or credit capacity; or
4. Make or use any untrue or misleading representations in the
offer or sale of the services of a credit services organization or engage,
directly or indirectly, in any act, practice, or course of business that
operates or would operate as fraud or deception upon any person in connection
with the offer or sale of the services of a credit services organization.
§ 134. Exemption from
bond and trust account provisions--Responsibility for employees or agents
If a credit services organization is in compliance with paragraph
1 of Section 3 of this act, [FN1] the salesperson, agent, or representative who
sells the services of that organization is not required to obtain a surety bond
and establish a trust account. Provided, however, said organization or entity
shall be responsible for the acts of their employees or agents performed within
the scope of their employment.
[FN1] Title 24, § 133.
§ 135. Information
statement--Written statement required
Before the execution of a contract or agreement between the buyer
and a credit services organization or before the receipt by the credit services
organization of any money or other valuable consideration, whichever occurs
first, the credit services organization shall provide the buyer with a
statement, in writing, containing all the information required by Section 6 of
this act. [FN1] The credit services organization shall maintain on file for a
period of two (2) years an exact copy of the statement, personally signed by
the buyer, acknowledging receipt of a copy of the statement.
[FN1] Title 24, § 136.
§ 136. Information
statement--Contents
The information statement required pursuant to Section 5 of this
act [FN1] shall include all of the following:
1. a. a complete and accurate statement of the buyer's right to review any file on the buyer maintained by any consumer reporting agency, as provided under the Federal Fair Credit Reporting Act, 15 U.S.C., Sections 1681 through 1681t,
b. a statement that the buyer may review his or her consumer
reporting agency file at no charge if a request is made to the consumer credit
reporting agency within thirty (30) days after receiving notice that credit has
been denied, and
c. the approximate price the buyer will be charged by the consumer
reporting agency to review his or her consumer reporting agency file;
2. A complete and
accurate statement of the buyer's right to dispute the completeness or accuracy
of any item contained in any file on the buyer maintained by any consumer
reporting agency;
3. A complete and
detailed description of the services to be performed by the credit services
organization for the buyer and the total amount the buyer will have to pay, or
become obligated to pay, for the services;
4. A statement asserting
the buyer's right to proceed against the bond or trust account required under
Section 3 of this act; [FN2] and
5. The name and address
of the surety company that issued the bond, or the name and address of the
depository and the trustee and the account number of the trust account.
[FN1] Title 24, § 135.
[FN2] Title 24, § 133.
§ 137.
Contracts--Contents--Form for "Notice of Cancellation"--Copies
A. Each contract between the buyer and a credit services
organization for the purchase of the services of the credit services
organization shall be in writing, dated, signed by the buyer, and include the
following:
1. A conspicuous statement in bold face type, in immediate proximity
to the space reserved for the signature of the buyer, as follows: "You,
the buyer, may cancel this contract at any time prior to midnight of the fifth
day after the date of the transaction. See the attached notice of cancellation
form for an explanation of this right";
2. The terms and conditions of payment, including the total of all
payments to be made by the buyer, whether to the credit services organization
or to some other person;
3. A full and detailed description of the services to be performed
by the credit services organization for the buyer, including all guarantees and
all promises of full or partial refunds, and the estimated date by which the
services are to be performed, or estimated length of time for performing the
services; and
4. The credit services
organization's principal business address which shall be the actual office
location of the organization and the name and address of its agent in the state
authorized to receive service of process.
B. The contract shall be accompanied by a completed form in
duplicate, captioned "Notice of Cancellation" that shall be attached
to the contract, be easily detachable, and contain in bold face type the
following statement written in the same language as used in the contract:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation, within five (5) days from the date the contract is signed.
If you cancel any payment made by you under this contract, it will
be returned within ten (10) days following receipt by the seller of your
cancellation notice.
To cancel this contract, mail or deliver a signed dated copy of
this cancellation notice, or any other written notice to
__________(name of seller) at __________(address of seller)
__________(place of business) not later than midnight __________(date)
I hereby cancel this transaction,
__________(date)
__________(purchaser's signature)"
C. The credit services organization shall give to the buyer a copy
of the completed contract and all other documents the credit services
organization requires the buyer to sign at the time they are signed.
§ 138. Waivers--Burden
of proof--Violations and jurisdiction--Enforcement of rights
A. Any waiver by a buyer of any part of this act is void. Any
attempt by a credit services organization to have a buyer waive rights given by
this act is a violation of this act.
B. In any proceeding involving this act, the burden of proving an
exemption or an exception from a definition is upon the person claiming it.
C. Any person who violates this act is guilty of a misdemeanor.
Any district court of this state has jurisdiction in equity to restrain and
enjoin the violation of this act.
D. This section does not prohibit the enforcement by any person of
any right provided by this or any other law.
§ 139. Action for
damages--Remedies not exclusive
A. Any buyer injured by a violation of this act may bring any
action for recovery of damages. Judgment shall be entered for actual damages,
but in no case less than the amount paid by the buyer to the credit services
organization, plus reasonable attorney's fees and costs. An award may also be
entered for punitive damages.
B. The remedies provided under this act are in addition to any
other procedures or remedies for any violation or conduct provided for in any
other law.
§ 140. Rules and
regulations
The Department of Consumer Credit shall administer and promulgate
rules and regulations to implement the provisions of this act.
§ 141. License
required--Extensions of credit in compliance with law
No person shall engage in business as a credit service
organization without first obtaining a license from the Administrator pursuant
to the provisions of the Credit Services Organization Act. Any extensions of
credit brokered or arranged on behalf of a buyer by a credit service
organization must comply with the provisions of the Uniform Consumer Credit
Code [FN1] and the Credit Services Organization Act.
[FN1] Title 14A, § 1-101 et seq.
§ 142. Application for
license--Resident agent
A. Applications for a credit service organization license shall be
under oath and shall state the full name and place of residence of the
applicant. If the applicant is a partnership, the full name and place of
residence of each member thereof shall be stated. If the applicant is a
corporation, the full name and place of residence of each officer or major
stockholder thereof shall be stated. The application shall give the approximate
location from which the business is to be conducted, and shall contain such
relevant information as the Administrator may require.
B. Each licensee shall maintain on file with the Administrator a
written appointment of a resident of this state as his agent for service of all
judicial or other process or legal notice, unless the licensee has appointed an
agent pursuant to another statute of this state. In case of noncompliance with
the provision of this section, such service may be made on the Administrator on
behalf of the licensee.
§ 143.
Fees--Administrator's investigation--Issuance or denial of license
A. Upon the filing of an application and bond, payment of the
annual license fee of One Hundred Dollars ($100.00), and an investigation fee
of One Hundred Dollars ($100.00), the Administrator shall conduct an
investigation. If the Administrator finds that the financial responsibility,
experience, character and general fitness of the applicant are such as to
warrant belief that the business will be operated pursuant to the Credit
Services Organization Act [FN1] and rules promulgated pursuant thereto, the
Administrator shall grant the application and issue to the applicant a license
which will evidence his authority to do business under the provisions of the
Credit Services Organization Act.
B. If the Administrator does not so find facts sufficient to
warrant issuance of a license, he shall notify the applicant. If within thirty
(30) days of such notification the applicant requests a hearing on the
application, a hearing shall be held within sixty (60) days after the date of
the request. In the event of the denial of a license, the
investigation fee shall be retained by the Administrator, but the annual
license fee shall be returned to the applicant.
C. The Administrator shall grant or deny such application for
license within sixty (60) days from its filing with the required fees, or from
the hearing thereon, if any, unless the period is extended by written agreement
between the applicant and the Administrator.
D. No license to engage in the business of a credit services
organization shall be issued for any location if a license has been issued and
is in effect under the provisions of Sections 3-501 through 3-514 of Title 14A of the
Oklahoma Statutes. As used in this subsection the term
"location" means the entire area in which a person licensed pursuant
to any provision of Title 14A of the Oklahoma Statutes conducts business. No
credit service organization may be connected with any location in which a
person licensed pursuant to any provision of Title 14A of the Oklahoma Statutes
conducts business, except by a passageway to which the public is not admitted.
[FN1] Title 24, § 131 et seq.
§ 144. Licenses--Contents--Display--Number--Term--Annual
fee
A. Each license shall state the name of the license and the
address of which the business is to be conducted. The license shall be
displayed at the place of business named in the license. The license shall not
be transferable or assignable except upon approval by the Administrator.
B. A separate license shall be required for each credit service
organization operated pursuant to the Credit Services Organization Act. [FN1]
The Administrator may issue more than one license to any one
person upon compliance with the provisions of the Credit Services Organization
Act as to each license. A licensee desiring to move his credit service
operation to another location shall give thirty (30) days' written notice to the
Administrator, who shall amend the license accordingly.
C. Each license shall remain in full force and effect until
relinquished, suspended, revoked or expired. Every licensee, on or before
December 1 of each year, shall pay the Administrator One Hundred Dollars
($100.00) for each license held by him as the annual fee for the succeeding
calendar year. If the annual fee remains unpaid fifteen (15) days after written
notice of delinquency has been given to the licensee by the Administrator, the
license shall thereupon expire, but expiration shall not occur before December
31 of any year for which an annual fee has been paid.
[FN1] Title 24, § 131 et seq.
§ 145. Suspension,
revocation or surrender of license
A. The Administrator may, after notice and hearing, suspend or
revoke any license if he finds that:
1. The licensee has failed to pay any fee or charge properly
imposed by the Administrator under the authority of the Credit Services
Organization Act: [FN1]
2. The licensee, either knowingly or without the exercise of due
care to prevent the same, has violated any provisions of the Credit Services
Organization Act or any regulation or order lawfully made pursuant thereto; or
3. Any fact or condition exists which, if it had existed or had
been known to exist at the time of the original application for a license,
clearly would have justified the Administrator in refusing
the license.
B. The hearing shall be held upon twenty (20) days' notice in
writing, setting forth the time and place thereof and a concise statement of
the facts alleged to warrant suspension or revocation. At the conclusion of the
hearing, the Administrator shall prepare a written order setting forth the
effective date of any suspension or revocation accompanied by findings of fact
and a copy thereof shall be forthwith delivered to the licensee. Such order,
findings and the evidence considered by the Administrator shall be filed with
the public records of the Administrator.
C. Any licensee may surrender any license by delivering it to the
Administrator with written notice of its surrender, but such surrender shall
not affect the licensee's civil or criminal liability for acts committed prior
thereto.
D. No revocation, suspension or surrender of any license shall
impair or affect the obligation of any preexisting lawful contract between the
licensee and any customer.
E. The Administrator may reinstate suspended licenses or issue new
licenses to a person whose license or licenses have been revoked if no fact or
condition then exists which clearly would have justified the Administrator in
refusing originally to issue such license pursuant to the Credit Services
Organization Act.
F. On application of any person and payment of the cost thereof,
the Administrator shall furnish under his seal and signature a certificate of
good standing or a certified copy of any license.
[FN1] Title 24, § 131 et seq.
§ 146. Investigation
and examination of books and records
A. At such times as the Administrator may deem necessary, the
Administrator or his duly authorized representative may make an examination of
the place of business of each licensee and may inquire into and examine the
transactions, books, accounts, papers, correspondence and records of such licensee
insofar as they pertain to the business regulated by the Credit Services
Organization Act. [FN1] Such books, accounts, papers,
correspondence and records shall also be open for inspection at any reasonable
time by any peace officer, without any need of judicial writ or other process.
In the course of an examination, the Administrator or his duly authorized
representative shall have free access to the office, place of business, files,
safes and vaults of such licensee, and shall have the right to make copies of
any books, accounts, papers, correspondence and records. The Administrator or
his duly authorized representative, during the course of such examination, may
administer oaths and examine any person under oath upon any subject pertinent
to any matter about which the Administrator is authorized or required by the
Credit Services Organization Act to consider, investigate or secure
information. Any licensee who fails or refuses to permit
the Administrator or his duly authorized representative to examine or make
copies of such books or other relevant documents shall be deemed to be in
violation of the Credit Services Organization Act and such failure or refusal
shall constitute grounds for the suspension or revocation of such license. The
information obtained in the course of any examination or inspection shall be
confidential, except in civil or administrative proceedings conducted by the
Administrator, or criminal proceedings instituted by the state. Each licensee
shall pay to the Administrator an amount assessed by the Administrator to cover
the direct or indirect cost of such examination, not to exceed Two Hundred
Dollars ($200.00) in any calendar year.
B. For the purpose of discovering violations of the Credit
Services Organization Act or of securing information required by the Credit
Services Organization Act, the Administrator or his duly authorized
representative may investigate the books, accounts, papers, correspondence and
records of any licensee or other person who the Administrator has reasonable
cause to believe is violating any provision of the Credit Services Organization
Act whether or not such person shall claim to be within the authority or scope
of the Credit Services Organization Act.
C. Each licensee shall keep or make available in this state such
books and records relating to credit service transactions made pursuant to the
Credit Services Organization Act as are necessary to enable the Administrator
to determine whether the licensee is complying with the Credit Services
Organization Act. Such books and records shall be consistent with accepted
accounting practices.
D. Each licensee shall preserve or make available such books and
records in this state relating to each of its credit service transactions for
four (4) years from the date of the transaction, or two (2) years from the date
of the final entry made thereon, whichever is later. Each licensee's system of
records shall be accepted if it discloses such information as may be reasonably
required pursuant to the Credit Services Organization Act. All agreements
signed by customers shall be kept at an office in this state designated by the
licensee, except when transferred under an agreement which gives the
Administrator access thereto.
E. Each licensee, annually on or before the first day of May or
other date thereafter fixed by the Administrator, shall file a report with the
Administrator setting forth such relevant information as the Administrator may
reasonably require concerning the business and operations during the preceding
calendar year for each licensed place of business conducted by such licensee
within the state. Such report shall be made under oath and shall be in the form
prescribed by the Administrator, who may make and publish annually a
consolidated analysis and recapitulation of such reports, but the individual
reports shall be held confidential.
[FN1] Title 24, § 131 et seq.
§ 147. Disclosures to
consumer--Applicability of disclosure requirements-- Credit histories--Fees
A. Every consumer reporting agency shall, upon request and proper
identification of any consumer, clearly and accurately disclose to the
consumer:
1. The nature and
substance of all information, except medical information, in its files on the
consumer at the time of the request;
2. The sources of the
information, except that the sources of information acquired solely for use in
preparing an investigative consumer report and actually used for no other
purpose need not be disclosed. Provided, in the event an action is brought
under this act, such sources shall be available to the plaintiff under
appropriate discovery procedures in the court in which the action is brought;
and
3. The recipients of any
consumer report on the consumer which it has furnished:
a. for employment purposes within the two-year period preceding the request, and
b. for any other purpose within the six-month period preceding the
request.
B. The requirements of subsection A of this section respecting the
disclosure of sources of information and the recipients of consumer reports do
not apply to information received or consumer reports furnished prior to the
effective date of this act, except to the extent that the matter involved is
contained in the files of the consumer reporting agency on that date.
C. All consumer reporting agencies, as such agencies are defined
in the Federal Fair Credit Reporting Act, 15 U.S.C., Sections 1681 through 1681t, which
operate offices in the State of Oklahoma shall allow any requesting person to
receive his or her credit history.
D. A consumer reporting agency shall make all disclosures and
furnish all consumer reports without charge to the consumer if requested within
thirty (30) days after receipt by such consumer of a notification from a debt
collection agency affiliated with such consumer reporting agency stating that
the consumer's credit rating may be or has been adversely affected. Otherwise,
the consumer reporting agency may impose a reasonable charge on the consumer:
1. For making disclosure
to such consumer, the charge for which shall be indicated to the consumer prior
to making disclosure; and
2. For furnishing credit
histories authorized in subsection C of this section, notifications,
statements, summaries or codifications to persons designated by the consumer,
the charge for which shall be indicated to the consumer prior to furnishing
such information.
Provided, no charge may
be made for notifying such persons of the deletion of information which is
found to be inaccurate or which can no longer be verified.
§ 148. Request of
consumer report--Notice to subject of report
A. Prior to requesting a consumer report for employment purposes,
the requestor or user of the consumer report shall provide written notice to
the person who is the subject of the consumer report. The notice shall inform
the consumer that a consumer report will be used and the notice shall contain a
box that the consumer may check to receive a copy of the consumer report. If
the consumer requests a copy of the report, the user of the consumer report
shall request that a copy be provided to the consumer when the user of the
consumer report requests its copy from the credit reporting agency. The report
sent to the consumer shall be provided at no charge to the consumer. As used in
this section, "consumer report" shall have the same meaning as that
term is defined in the federal Fair Credit Reporting Act, 15 U.S.C., Sections 1681 et seq.
B. No person shall be held liable for any violation of this
section if such person shows by a preponderance of the evidence that, at the
time of the alleged violation, such person maintained reasonable procedures to
assure compliance with this section.
Case Law
I identified no significant cases construing the Act. The annotations do note the following opinion
of the Oklahoma Attorney General, however:
Loan brokers are "credit services organizations" under the Credit
Services Organization Act [24 Okl.St.Ann. § 131 et seq.] if the loans in
question are for personal, family or household purposes. Op.Atty.Gen. No.
87-126 (Dec. 14, 1987).