BILL REQ. #:  S-1022.1 

Read first time 01/27/2005.   Referred to Committee on Financial Institutions, Housing & Consumer Protection.

     AN ACT Relating to extortionate extension of credit; and amending RCW 9A.82.020.

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

Sec. 1   RCW 9A.82.020 and 2001 c 222 s 4 are each amended to read as follows:
     (1) A person who knowingly makes an extortionate extension of credit is guilty of a class B felony.
     (2) In a prosecution under this section, if it is shown that all of the ((following)) factors in either (a) or (b) of this subsection are present in connection with the extension of credit, there is prima facie evidence that the extension of credit was extortionate:
     (a)(i) The repayment of the extension of credit, or the performance of any promise given in consideration thereof, would be unenforceable at the time the extension of credit was made through civil judicial processes against the debtor in the county in which the debtor, if a natural person, resided or in every county in which the debtor, if other than a natural person, was incorporated or qualified to do business((.));
     (((b))) (ii) The extension of credit was made at a rate of interest in excess of an annual rate of forty-five percent calculated according to the actuarial method of allocating payments made on a debt between principal and interest, pursuant to which a payment is applied first to the accumulated interest and the balance is applied to the unpaid principal((.));
     (((c))) (iii) The creditor intended the debtor to believe that failure to comply with the terms of the extension of credit would be enforced by extortionate means((.)); and
     (((d))) (iv) Upon the making of the extension of credit, the total of the extensions of credit by the creditor to the debtor then outstanding, including any unpaid interest or similar charges, exceeded one hundred dollars; or
     (b) The extension of credit was made by a licensee under chapter 31.45 RCW or an unlicensed person required to be licensed by chapter 31.45 RCW, when the following factors are present:
     (i) The extension of credit violated the military best practices set forth in RCW 31.45.--- (section 1, chapter ... (Senate Bill No. 5415), Laws of 2005; and
     (ii) The extension of credit was an act in a pattern of violations of the statutory requirements of chapter 31.45 RCW. "A pattern of violations" means ten or more of the same type of violation within one year or any violations of chapter 31.45 RCW victimizing or affecting ten or more borrowers within one year.