[atlas:bill]

AN ACT Relating to small loans; amending RCW 31.45.010 and 31.45.073; adding a new section to chapter 30.04 RCW; adding a new section to chapter 31.12 RCW; and adding a new section to chapter 32.04 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 30.04 RCW to read as follows:

(1) A bank may make a small loan by advancing moneys on the security of a postdated check or draft delivered at the time, provided the time period between the date the loan is granted and the postdated check does not exceed thirty-one days. All postdated checks or drafts under this section shall be deposited as soon as practicable after the date of the check or draft has passed.

(2) "Small loan" as used in this section means a loan of up to six hundred dollars for up to thirty-one days.

(3) A bank may charge fees or interest for small loans under this section not to exceed in the aggregate ten percent of the principal amount borrowed.

NEW SECTION. Sec. 2. A new section is added to chapter 31.12 RCW to read as follows:

(1) A credit union may make a small loan by advancing moneys on the security of a postdated check or draft delivered at the time, provided the time period between the date the loan is granted and the postdated check does not exceed thirty-one days. All postdated checks or drafts under this section shall be deposited as soon as practicable after the date of the check or draft has passed.

(2) "Small loan" as used in this section means a loan of up to six hundred dollars for up to thirty-one days.

(3) A credit union may charge fees or interest for small loans under this section not to exceed in the aggregate ten percent of the principal amount borrowed.

NEW SECTION. Sec. 3. A new section is added to chapter 32.04 RCW to read as follows:

(1) A savings bank may make a small loan by advancing moneys on the security of a postdated check or draft delivered at the time, provided the time period between the date the loan is granted and the postdated check does not exceed thirty-one days. All postdated checks or drafts under this section shall be deposited as soon as practicable after the date of the check or draft has passed.

(2) "Small loan" as used in this section means a loan of up to six hundred dollars for up to thirty-one days.

(3) A savings bank may charge fees or interest for small loans under this section not to exceed in the aggregate ten percent of the principal amount borrowed.

Sec. 4. RCW 31.45.010 and 1995 c 18 s 1 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Check casher" means an individual, partnership, unincorporated association, or corporation that, for compensation, engages, in whole or in part, in the business of cashing checks, drafts, money orders, or other commercial paper serving the same purpose.

(2) "Check seller" means an individual, partnership, unincorporated association, or corporation that, for compensation, engages, in whole or in part, in the business of or selling checks, drafts, money orders, or other commercial paper serving the same purpose.

(3) "Licensee" means a check casher or seller licensed by the director to engage in business in accordance with this chapter. For purposes of the enforcement powers of this chapter, including the power to issue cease and desist orders under RCW 31.45.110, "licensee" also means a check casher or seller who fails to obtain the license required by this chapter.

(4) "Small loan" means a loan of up to ((~~five~~)) six hundred dollars for a period of thirty-one days or less.

(5) "Director" means the director of financial institutions.

Sec. 5. RCW 31.45.073 and 1995 c 18 s 2 are each amended to read as follows:

(1) No licensee may engage in the business of making small loans without first obtaining a small loan endorsement to its license from the director in accordance with this chapter. An endorsement will be required for each location where a licensee engages in the business of making small loans, but a small loan endorsement may authorize a licensee to make small loans at a location different than the licensed locations where it cashes or sells checks or drafts. A licensee may have more than one endorsement.

(2) A licensee that has obtained the required small loan endorsement may charge interest or fees for small loans not to exceed in the aggregate ((~~fifteen~~)) ten percent of the principal amount borrowed. The director may determine by rule which fees, if any, are not subject to the fifteen percent limitation.

(3) In connection with making a small loan, a licensee may advance moneys on the security of a postdated check or draft provided the time period between the date the loan is granted and the date of the postdated check does not exceed thirty-one days. A licensee shall deposit all postdated checks or drafts as soon as practicable after the date of the check or draft has passed.

(4) No person may at any time cash or advance any moneys on a postdated check or draft in excess of the amount of goods or services purchased without first obtaining a small loan endorsement to a check casher or check seller license.