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                                          ENGROSSED SENATE BILL NO. 3415

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State of Washington                              49th Legislature                              1985 Regular Session

By Senators Bender, McDermott, Warnke, Sellar, Newhouse, Moore and Bottiger

Read first time 1/29/85 and referred to Committee on Financial Institutions.

AN ACT Relating to authorization of adjustable interest rates not exceeding the higher of twelve percent per annum or four percentage points above the equivalent coupon issue yield; amending RCW 19.52.020; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 2, chapter 80, Laws of 1899 as last amended by section 1, chapter 78, Laws of 1981 and RCW 19.52.020 are each amended to read as follows:

          Any rate of interest not exceeding the higher of twelve percent per annum or four percentage points above the equivalent coupon issue yield (as published by the Federal Reserve Bank of San Francisco) of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the ((preceding)) calendar month((, agreed to in writing by)) preceding the establishment or any adjustment of such interest rate established in accordance with a written agreement of the parties to the contract, shall be legal, and no person shall directly or indirectly take or receive in money, goods, or things in action, or in any other way, any greater interest for the loan or forbearance of any money, goods, or things in action:  PROVIDED, That in any loan of money in which the funds advanced do not exceed the sum of five hundred dollars, a setup charge may be charged and collected by the lender, and such setup charge shall not be considered interest hereunder:  PROVIDED FURTHER, That such setup charge does not exceed four percent of the amount of funds advanced, or fifteen dollars, whichever is the lesser, except that on loans of under one hundred dollars a minimum not exceeding four dollars may be so charged.

          Any loan made pursuant to a commitment to lend at an interest rate permitted at the time the commitment is made shall not be usurious.  Credit extended pursuant to an open-end credit agreement upon which interest is computed on the basis of a balance or balances outstanding during a billing cycle shall not be usurious if on any one day during the billing cycle the rate at which interest is charged is not usurious ((on any day during the billing cycle)).

NEW SECTION. Sec. 2.     This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1985.