For Immediate Release: February 16, 2007

Gumm Passes First Bill in Tied Oklahoma Senate

A bill changing the policy of a few “bad actors” in the payday lending business was the first approved by an Oklahoma Senate evenly split between Democrats and Republicans.

Senate Bill 693 by Senator Jay Paul Gumm, a Democrat from Durant, would prevent payday lenders – those that make high-interest, high-risk short term loans with a post-dated check – from cashing the check of a customer who dies before the loan matures. The measure passed without opposition 47-0 Thursday.
That practice, currently allowed under Oklahoma law, effectively put these unsecured loans in a priority position over any other debts a deceased customer may owe, Gumm explained. In addition, the practice also causes resources to be unexpectedly drained away as a family is trying to put in order the affairs of a loved one.

“When a family is trying to make final arraignments for a loved one who just passed away, the last thing they should have to worry about is an unsecured creditor cashing a post-dated check the family might not even know about,” he said. “That practice seems to me to be fundamentally wrong, to prey on people during an exceptionally emotional time in their lives.”

Gumm said most payday lending companies already have policies in place preventing this sort of practice. However, a situation occurred in his own Senate district in southern Oklahoma that prompted him to write the bill.

“The bill that passed off the Senate floor Thursday with bipartisan support will stop that practice from ever happening again to any Oklahoma family,” he said. “I am grateful that every one of my colleagues agreed.”

Gumm said the bill places debts from payday lending companies on the same level as any other debt – allowing these high-interest, high-risk lenders to seek reimbursement through the probate process like any other creditor would. He said the bill also protects the family members of the deceased loved one who may have used this type of loan.

“This bill is a reasonable common sense approach and would place reasonable restrictions on these payday lenders,” he said.

The bill now moves to the House of Representatives for consideration.

For more information contact:
Senator Gumm's Office - (405) 521-5586