Washington Amends Statute of Limitations and adds New Provisions
by: Nicole Legere
The state of Washington amended several existing provisions by clarifying the statute of limitations. Additionally, two sections were added to establish new requirements for the protection of information and submission of reports. The first section verifies that information remains covered under privacy laws after being disclosed to the Director of the Department of Financial Institutions (Director). The second section requires licensees to submit reports of condition. These provisions are effective June 11, 2014.
Statute of Limitations
The first amendment clarified the statute of limitations for actions brought against escrow agents under a statute which permits the denial, suspension and revocation of an escrow agent’s license. Under this statute, an agent is prohibited from a number of different behaviors including committing any crime involving moral turpitude or dishonest dealings. Also prohibited is committing acts or engaging in conduct that demonstrates the applicant or licensee to be incompetent or untrustworthy, or a source of injury and loss to the public. Under this amendment, the statute of limitations for any action brought is five years.
The statute of limitations for imposing fines and ordering restitution against escrow agents was addressed in a second amendment. This statute permits fines for false statements, or the omission of material information, on any application which, if known, would have permitted the denial of the application. Additionally, fines can be imposed for failure to pay fees, maintain required bonds, or comply with directives, orders, or subpoenas. The statute of limitations for these actions is five years.
A third amendment addressed the statute of limitations for rules relating to the licensing and regulation of licenses. This statute allows for the denial of any application where the individual fails to demonstrate that he meets the licensing requirements. The failure to comply with a subpoena, make restitution to an injured borrower, and making a false statement or omission are all permissible reasons to deny an application. The statute of limitations for actions brought under this statute is five years.
A final statute allows the Director to issue a statement of charges to any licensee or applicant based on that individual’s behavior. Prohibited behavior includes engaging in unsafe or unsound financial practices, obtaining a license through fraud, and committing any act of fraudulent or dishonest dealing. Engaging in acts or conduct that demonstrates incompetence or untrustworthiness, or is a source of injury and loss to the public is also prohibited. The statute of limitations for these actions is five years.
Privacy of Information
The state of Washington also added an additional section which addresses the privacy of material provided to the department when federal laws, and the laws of other states, are applicable. According to the statute, privacy requirements under federal or state law continue to apply to information and material after it has been disclosed to the department. This means that information and material may be shared with state and federal officials without the loss of privilege or confidentiality protections. Additionally, confidentiality and privilege continues to apply to information contained in a memorandum of understanding or enforcement order after the document has been signed by the Director.
Reporting
Lastly, a section was added to require each licensee on a nationwide licensing system to submit reports of condition. These reports must be in the form required by the director, and contain all necessary information as determined by the Director.
About the Author
Nicole Legere, J.D. is AVP and Senior Regulatory Compliance Consultant at Bankers Advisory.
She is a graduate of the University of Massachusetts and earned her Juris Doctor at Roger Williams School of Law. She is admitted to the Bar in Massachusetts and New York.
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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