Washington State Revises Consumer Loan Act
by: Margaret Wright, Esq.
The Washington State Senate has passed Senate Bill 5207 amending the Washington Consumer Loan Act. Notably, the Bill in part makes amendments regarding fee collection, key definitions, enforcement in relation to licensee violations, exemptions, and recordkeeping requirements.
Fee Collection
Advanced fees may no longer be collected for loan modification services. (RCW 31.04.293, RCW 31.04.297) A servicer is no longer allowed to charge a fee for preparing a furnishing the required written statement in response to a borrower’s written request for information. (RCW 31.04.290)
Definitions
Borrower definition is amended to include “a person who consults with or retains a licensee or person subject to this chapter in an effort to obtain, or who seeks information about obtaining a residential mortgage loan modification, regardless of whether that person actually obtains a residential mortgage”.
Residential mortgage loan modification services” include negotiating, attempting to negotiate, arranging, attempting to arrange, or otherwise offering to perform a residential mortgage loan modification for compensation or gain”.
Simple interest method definition regarding application to nonresidential loans secured by real estate and residential mortgage loans has been also technically amended. (RCW 31.04.015)
Violations and Enforcement
If a licensee does not maintain their license as required by the Consumer Loan Act:
- All non-third-party fees charged in connection with a residential mortgage loan origination must be refunded to the borrower, with the exception of interest charges.
- All fees or interest charged to the borrower in the making of a non-residential loan must be refunded. (RCW 31.04.027)
Additionally, enforcement amendments include an assessment of a fine of up to $100 per day, per violation. (RCW 31.04.093(4))
License expiration will occur if a licensee fails to comply with the annual assessment requirement. A notice of expiration will be provided to the licensee at their address of record. After the 15th day following the date notice was provided, and the assessment remains unpaid, the license will expire. (RCW 31.04.093(12))
Exemptions
The burden of proving applicability of an exception, exemption or preemption from the Consumer Loan Act is upon the person claiming the exception, exemption or preemption. (RCW 31.04.025)
Recordkeeping
Recordkeeping requirements have been extended to 3 years from the previous 25 month requirement. (RCW 31.04.155)
View the entire bill on AllRegs:
About the Author:
Margaret is Vice President and Senior Counsel at Bankers Advisory, Inc. She is a graduate of Stonehill College and earned her J.D. at Suffolk University Law School. She serves on the Compliance Committee of the Massachusetts Mortgage Bankers Association and is a admitted to the Massachusetts Bar. Margaret can be reached at Margaret@bankersadvisory.com
Margaret Wright, JD, is regulatory compliance director with CLA. She is a graduate of Stonehill College and earned her juris doctor at Suffolk University Law School. She is admitted to the Massachusetts Bar.
Comments are closed.