BILL REQ. #: S-4492.2
| State of Washington | 60th Legislature | 2008 Regular Session |
Read first time 01/22/08. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to homeownership security, responsible mortgage lending, and improving protections for residential mortgage loan consumers; amending RCW 19.146.005 and 61.24.030; reenacting and amending RCW 9.94A.515 and 9A.82.010; adding new sections to chapter 19.146 RCW; adding a new section to chapter 30.04 RCW; adding a new section to chapter 31.04 RCW; adding a new section to chapter 31.12 RCW; adding a new section to chapter 32.04 RCW; adding a new section to chapter 33.04 RCW; adding a new chapter to Title 19 RCW; and prescribing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that responsible
mortgage lending and homeownership are important to the citizens of the
state of Washington. The legislature declares that protecting our
residents and our economy from the threat of widespread foreclosures
and providing homeowners with access to residential mortgage loans on
fair and equitable terms is in the public interest. The legislature
further finds that this act is necessary to encourage responsible
lending, protect borrowers, and preserve access to credit in the
residential real estate lending market.
NEW SECTION. Sec. 2 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Adjustable rate mortgage" or "ARM" means a payment option ARM
or a hybrid ARM (commonly known as a 2/28 or 3/27 loan).
(2) "Application" means the same as in Regulation X, Real Estate
Settlement Procedures, 24 C.F.R. Sec. 3500, as used in an application
for a residential mortgage loan.
(3) "Borrower" means any person who consults with or retains a
person subject to this chapter in an effort to seek information about
obtaining a residential mortgage loan, regardless of whether that
person actually obtains such a loan.
(4) "Department" means the department of financial institutions.
(5) "Director" means the director of the department of financial
institutions.
(6) "Financial institution" means commercial banks and alien banks
subject to regulation under Title 30 RCW, savings banks subject to
regulation under Title 32 RCW, savings associations subject to
regulation under Title 33 RCW, credit unions subject to regulation
under chapter 31.12 RCW, consumer loan companies subject to regulation
under chapter 31.04 RCW, and mortgage brokers and lenders subject to
regulation under chapter 19.146 RCW.
(7) "Fully indexed rate" means the index rate prevailing at the
time a residential mortgage loan is made, plus the margin that will
apply after the expiration of an introductory interest rate.
(8) "Negative amortization" means an increase in the principal
balance of a loan caused when the loan agreement allows the borrower to
make payments less than the amount needed to pay all the interest that
has accrued on the loan. The unpaid interest is added to the loan
balance and becomes part of the principal.
(9) "Person" means individuals, partnerships, associations, limited
liability companies, limited liability partnerships, trusts,
corporations, and all other legal entities.
(10) "Residential mortgage loan" means an extension of credit
secured by residential real property located in this state upon which
is constructed or intended to be constructed, a single-family dwelling
or multiple-family dwelling of four or less units. It does not include
a reverse mortgage or a borrower credit transaction that is secured by
rental property. It does not include a bridge loan. It does not
include loans to individuals making or acquiring a residential mortgage
loan solely with his or her own funds for his or her own investment.
For purposes of this subsection, a "bridge loan" is any temporary loan,
having a maturity of one year or less, for the purpose of acquisition
or construction of a dwelling intended to become the borrower's
principal dwelling.
(11) "The interagency guidance on nontraditional mortgage product
risks" means the guidance document issued in September 2006 by the
office of the comptroller of the currency, the board of governors of
the federal reserve system, the federal deposit insurance corporation,
the office of thrift supervision, and the national credit union
administration, and the guidance on nontraditional mortgage product
risks released in November 2006 by the conference of state bank
supervisors and the American association of residential mortgage
regulators.
(12) "The statement on subprime mortgage lending" means the
guidance document issued in June 2007 by the office of the comptroller
of the currency, the board of governors of the federal reserve system,
the federal deposit insurance corporation, the office of thrift
supervision, and the national credit union administration, and the
statement on subprime mortgage lending released in July 2007 by the
conference of state bank supervisors, the American association of
residential mortgage regulators, and the national association of
consumer credit administrators.
NEW SECTION. Sec. 3 (1) In addition to any other requirements
under federal or state law, a residential mortgage loan may not be made
unless a disclosure summary of all material terms, as adopted by the
department in subsection (2) of this section, is placed on a separate
sheet of paper and has been provided by a financial institution to the
borrower within three business days following receipt of a loan
application. If any material terms of the residential mortgage loan
change before closing, a new disclosure summary must be provided to the
borrower within three days of any such change or at least three days
before closing, whichever is earlier.
(2) The department shall adopt, by rule, a disclosure summary form
with a content and format containing simple, plain-language terms that
are reasonably understandable to the average person without the aid of
third-party resources and shall include, but not be limited to, the
following items: Fees and discount points on the loan; interest rates
of the loan; broker fees; the broker's yield spread premium as a dollar
amount; whether the loan contains prepayment penalties; whether the
loan contains a balloon payment; whether the property taxes and
property tax insurance are escrowed; whether the loan payments will
adjust at the fully indexed rates; and whether there is a price added
or premium charged because the loan is based on reduced documentation.
(3) The director may, at his or her discretion, require by rule
other information relating to a residential mortgage loan to be
included in the disclosure summary if the director determines that it
is necessary to protect consumers. The director may adopt rules
creating a standard form of disclosure summary to be used as a guide by
financial institutions in fulfilling the requirements of this section.
NEW SECTION. Sec. 4 (1) The department shall apply the
interagency guidance on nontraditional mortgage product risks and the
statement on subprime mortgage lending to financial institutions.
(2)(a) Financial institutions subject to this chapter shall adopt
and adhere to internal policies and procedures that are reasonably
intended to achieve the objectives set forth in the interagency
guidance on nontraditional mortgage product risks and the statement on
subprime mortgage lending.
(b) The department shall adopt rules as required to implement this
section.
NEW SECTION. Sec. 5 A financial institution may not make or
facilitate the origination of a residential mortgage loan that includes
a prepayment penalty or fee that extends beyond sixty days prior to the
initial reset period of an adjustable rate mortgage.
NEW SECTION. Sec. 6 A financial institution may not make or
facilitate a residential mortgage loan that includes any provisions
that impose negative amortization and which are subject to the
interagency guidance on nontraditional mortgage product risks and the
statement on subprime mortgage lending.
NEW SECTION. Sec. 7 A person licensed or subject to licensing,
or otherwise subject to regulation pursuant to chapter 19.146 RCW, or
a consumer loan company licensed or subject to licensing under chapter
31.04 RCW may not steer, counsel, or direct any borrower to accept a
residential mortgage loan product with a risk grade less favorable than
the risk grade that the borrower would qualify for based on the
licensee or other regulated person's then current underwriting
guidelines, prudently applied, considering the information available to
the licensee or other regulated person, including the information
provided by the borrower. A licensee or other regulated person has not
violated this requirement if the risk grade determination applied to a
borrower is reasonably based on the licensee or other regulated
person's underwriting guidelines for the borrower's appropriate risk
grade category and the borrower is offered choices of residential
mortgage loan products within the borrower's appropriate risk grade
category.
NEW SECTION. Sec. 8 The department may adopt rules necessary to
implement this chapter, including but not limited to the authority to
identify which sections of this act apply to open-end credit plans.
NEW SECTION. Sec. 9 It is unlawful for any person in connection
with making, brokering, or obtaining a residential mortgage loan to
directly or indirectly:
(1)(a) Employ any scheme, device, or artifice to defraud or
materially mislead any borrower during the lending process; (b) defraud
or materially mislead any lender, defraud or materially mislead any
person, or engage in any unfair or deceptive practice toward any person
in the lending process; or (c) obtain property by fraud or material
misrepresentation in the lending process;
(2) Knowingly make any misstatement, misrepresentation, or omission
during the mortgage lending process knowing that it may be relied on by
a mortgage lender, borrower, or any other party to the mortgage lending
process;
(3) Use or facilitate the use of any misstatement,
misrepresentation, or omission, knowing the same to contain a
misstatement, misrepresentation, or omission, during the mortgage
lending process with the intention that it be relied on by a mortgage
lender, borrower, or any other party to the mortgage lending process;
or
(4) Receive any proceeds or anything of value in connection with a
residential mortgage closing that such person knew resulted from a
violation of subsection (1), (2), or (3) of this section.
NEW SECTION. Sec. 10 (1) Any person who knowingly violates
section 9 of this act or who knowingly aids or abets in the violation
of section 9 of this act is guilty of a class B felony punishable under
RCW 9A.20.021(1)(b). Mortgage fraud is a serious level III offense per
chapter 9.94A RCW.
(2) Any person who knowingly alters, destroys, shreds, mutilates,
or conceals a record, document, or other object, or attempts to do so,
with the intent to impair the investigation and prosecution of this
crime is guilty of a class B felony punishable under RCW
9A.20.021(1)(b).
(3) No information may be returned more than (a) five years after
the violation, or (b) three years after the actual discovery of the
violation, whichever date of limitation is later.
(4) Any person who violates this chapter is subject to civil
forfeiture statutes.
NEW SECTION. Sec. 11 (1)(a) It is unlawful for a person to use
or invest proceeds, or any part of proceeds, knowing that the proceeds,
or any part of the proceeds, were derived, directly or indirectly, from
a pattern of mortgage fraud activity, in the acquisition of any title
to, or any right, interest, or equity in, real property or in the
establishment or operation of any enterprise.
(b) A violation of this subsection is a class B felony.
(2)(a) It is unlawful for a person to acquire or maintain, directly
or indirectly, any interest in or control of any enterprise or real
property knowing the interest or control was obtained through a pattern
of mortgage fraud.
(b) A violation of this subsection is a class B felony.
(3)(a) It is unlawful for a person to knowingly conspire or attempt
to violate subsection (1) or (2) of this section.
(b) A violation of this subsection is a class C felony.
NEW SECTION. Sec. 12 Any penalty imposed for violation of this
chapter is in addition to, and not in lieu of, any civil or
administrative penalty or sanction otherwise authorized by law.
NEW SECTION. Sec. 13 The director or the director's designee
may, at his or her discretion, take such actions as provided for in
Titles 30, 32, and 33 RCW, and chapters 31.12, 31.04, and 19.146 RCW,
to enforce, investigate, or examine persons covered by this chapter.
NEW SECTION. Sec. 14 A new section is added to chapter 19.146
RCW to read as follows:
The director or the director's designee may take such action as
provided for in this chapter to enforce, investigate, or examine
persons covered by chapter 19.--- RCW (sections 1 through 13 of this
act).
NEW SECTION. Sec. 15 A new section is added to chapter 30.04 RCW
to read as follows:
The director or the director's designee may take such action as
provided for in this title to enforce, investigate, or examine persons
covered by chapter 19.--- RCW (sections 1 through 13 of this act).
NEW SECTION. Sec. 16 A new section is added to chapter 31.04 RCW
to read as follows:
The director or the director's designee may take such action as
provided for in this chapter to enforce, investigate, or examine
persons covered by chapter 19.--- RCW (sections 1 through 13 of this
act).
NEW SECTION. Sec. 17 A new section is added to chapter 31.12 RCW
to read as follows:
The director or the director's designee may take such action as
provided for in this chapter to enforce, investigate, or examine
persons covered by chapter 19.--- RCW (sections 1 through 13 of this
act).
NEW SECTION. Sec. 18 A new section is added to chapter 32.04 RCW
to read as follows:
The director or the director's designee may take such action as
provided for in this title to enforce, investigate, or examine persons
covered by chapter 19.--- RCW (sections 1 through 13 of this act).
NEW SECTION. Sec. 19 A new section is added to chapter 33.04 RCW
to read as follows:
The director or the director's designee may take such action as
provided for in this title to enforce, investigate, or examine persons
covered by chapter 19.--- RCW (sections 1 through 13 of this act).
NEW SECTION. Sec. 20 A new section is added to chapter 19.146
RCW to read as follows:
The activities of a mortgage broker affect the public interest, and
require that all actions of mortgage brokers, designated brokers, loan
originators, and other persons subject to this chapter be actuated by
good faith, abstain from deception, and practice honesty and equity in
all matters related to their profession. The duty of preserving the
integrity of the mortgage broker business rests upon the mortgage
broker, designated broker, loan originator, and other persons subject
to this chapter.
Sec. 21 RCW 19.146.005 and 2006 c 19 s 1 are each amended to read
as follows:
The legislature finds and declares that the brokering of
residential real estate loans substantially affects the public
interest, requiring that all actions in mortgage brokering be actuated
by good faith, and that mortgage brokers, designated brokers, loan
originators, and other persons subject to this chapter abstain from
deception, and practice honesty and equity in all matters relating to
their profession. The practices of mortgage brokers and loan
originators have had significant impact on the citizens of the state
and the banking and real estate industries. It is the intent of the
legislature to establish a state system of licensure in addition to
rules of practice and conduct of mortgage brokers and loan originators
to promote honesty and fair dealing with citizens and to preserve
public confidence in the lending and real estate community.
Sec. 22 RCW 61.24.030 and 1998 c 295 s 4 are each amended to read
as follows:
It shall be requisite to a trustee's sale:
(1) That the deed of trust contains a power of sale;
(2) That the deed of trust contains a statement that the real
property conveyed is not used principally for agricultural purposes;
provided, if the statement is false on the date the deed of trust was
granted or amended to include that statement, and false on the date of
the trustee's sale, then the deed of trust must be foreclosed
judicially. Real property is used for agricultural purposes if it is
used in an operation that produces crops, livestock, or aquatic goods;
(3) That a default has occurred in the obligation secured or a
covenant of the grantor, which by the terms of the deed of trust makes
operative the power to sell;
(4) That no action commenced by the beneficiary of the deed of
trust is now pending to seek satisfaction of an obligation secured by
the deed of trust in any court by reason of the grantor's default on
the obligation secured: PROVIDED, That (a) the seeking of the
appointment of a receiver shall not constitute an action for purposes
of this chapter; and (b) if a receiver is appointed, the grantor shall
be entitled to any rents or profits derived from property subject to a
homestead as defined in RCW 6.13.010. If the deed of trust was granted
to secure a commercial loan, this subsection shall not apply to actions
brought to enforce any other lien or security interest granted to
secure the obligation secured by the deed of trust being foreclosed;
(5) That the deed of trust has been recorded in each county in
which the land or some part thereof is situated;
(6) That prior to the date of the notice of trustee's sale and
continuing thereafter through the date of the trustee's sale, the
trustee must have a street address in this state where personal service
of process may be made; and
(7) That at least thirty days before notice of sale shall be
recorded, transmitted or served, written notice of default shall be
transmitted by the beneficiary or trustee to the borrower and grantor
at their last known addresses by both first class and either registered
or certified mail, return receipt requested, and the beneficiary or
trustee shall cause to be posted in a conspicuous place on the
premises, a copy of the notice, or personally served on the borrower
and grantor. This notice shall contain the following information:
(a) A description of the property which is then subject to the deed
of trust;
(b) Each county in which the deed of trust is recorded and the
document number given to the deed of trust upon recording by each
county auditor or recording officer;
(c) That the beneficiary has declared the borrower or grantor to be
in default, and a concise statement of the default alleged;
(d) An itemized account of the amount or amounts in arrears if the
default alleged is failure to make payments;
(e) An itemized account of all other specific charges, costs, or
fees that the borrower, grantor, or any guarantor is or may be obliged
to pay to reinstate the deed of trust before the recording of the
notice of sale;
(f) The total of (d) and (e) of this subsection, designated clearly
and conspicuously as the amount necessary to reinstate the note and
deed of trust before the recording of the notice of sale;
(g) That failure to cure the alleged default within thirty days of
the date of mailing of the notice, or if personally served, within
thirty days of the date of personal service thereof, may lead to
recordation, transmittal, and publication of a notice of sale, and that
the property described in (a) of this subsection may be sold at public
auction at a date no less than one hundred twenty days in the future;
(h) That the effect of the recordation, transmittal, and
publication of a notice of sale will be to (i) increase the costs and
fees and (ii) publicize the default and advertise the grantor's
property for sale;
(i) That the effect of the sale of the grantor's property by the
trustee will be to deprive the grantor of all their interest in the
property described in (a) of this subsection; ((and))
(j) That the borrower, grantor, and any guarantor has recourse to
the courts pursuant to RCW 61.24.130 to contest the alleged default on
any proper ground; and
(k) In the event the property secured by the deed of trust is
owner-occupied residential property, a statement, prominently set out
at the beginning of the notice, which shall state as follows:
"You should take care to protect your interest in your home. This
notice of default (your failure to pay) is the first step in a process
that could result in you losing your home. You should carefully review
your options. For example:
Can you pay and stop the foreclosure process?
Do you dispute the failure to pay?
Can you sell your property to preserve your equity?
Are you able to refinance this loan with a new loan from another
lender with payments, terms, and fees that are more affordable?
Do you qualify for any government or private homeowner assistance
programs?
Do you know if filing for bankruptcy is an option? What are the
pros and cons of doing so?
Do not ignore this notice; because if you do nothing, you could
lose your home at a foreclosure sale. (No foreclosure sale can be held
any sooner than ninety days after a notice of sale is issued and a
notice of sale cannot be issued until thirty days after this notice.)
Also, if you do nothing to pay what you owe, be careful of people who
claim they can help you. There are many individuals and businesses
that watch for the notices of sale in order to unfairly profit as a
result of borrowers' distress.
You may feel you need help understanding what to do. There are a
number of professional resources available, including home loan
counselors and attorneys, who may assist you. Many legal services are
lower-cost or even free, depending on your ability to pay. If you
desire legal help in understanding your options or handling this
default, you may obtain a referral (at no charge) by contacting the
county bar association in the county where your home is located. These
legal referral services also provide information about lower-cost or
free legal services for those who qualify."
Sec. 23 RCW 9.94A.515 and 2007 c 368 s 14 and 2007 c 199 s 10 are
each reenacted and amended to read as follows:
| TABLE 2 | ||
| CRIMES INCLUDED WITHIN EACH SERIOUSNESS LEVEL | ||
| XVI | ||
| XV | ||
| XIV | ||
| XIII | ||
| XII | ||
| XI | ||
| X | ||
| IX | ||
| VIII | ||
| VII | ||
| VI | ||
| V | ||
| IV | ||
| III | ||
| Escape 2 (RCW 9A.76.120) | ||
| Mortgage Fraud (section 9 of this act) | ||
| II | ||
| I | ||
Sec. 24 RCW 9A.82.010 and 2006 c 277 s 5 and 2006 c 193 s 2 are
each reenacted and amended to read as follows:
Unless the context requires the contrary, the definitions in this
section apply throughout this chapter.
(1)(a) "Beneficial interest" means:
(i) The interest of a person as a beneficiary under a trust
established under Title 11 RCW in which the trustee for the trust holds
legal or record title to real property;
(ii) The interest of a person as a beneficiary under any other
trust arrangement under which a trustee holds legal or record title to
real property for the benefit of the beneficiary; or
(iii) The interest of a person under any other form of express
fiduciary arrangement under which one person holds legal or record
title to real property for the benefit of the other person.
(b) "Beneficial interest" does not include the interest of a
stockholder in a corporation or the interest of a partner in a general
partnership or limited partnership.
(c) A beneficial interest is considered to be located where the
real property owned by the trustee is located.
(2) "Control" means the possession of a sufficient interest to
permit substantial direction over the affairs of an enterprise.
(3) "Creditor" means a person making an extension of credit or a
person claiming by, under, or through a person making an extension of
credit.
(4) "Criminal profiteering" means any act, including any
anticipatory or completed offense, committed for financial gain, that
is chargeable or indictable under the laws of the state in which the
act occurred and, if the act occurred in a state other than this state,
would be chargeable or indictable under the laws of this state had the
act occurred in this state and punishable as a felony and by
imprisonment for more than one year, regardless of whether the act is
charged or indicted, as any of the following:
(a) Murder, as defined in RCW 9A.32.030 and 9A.32.050;
(b) Robbery, as defined in RCW 9A.56.200 and 9A.56.210;
(c) Kidnapping, as defined in RCW 9A.40.020 and 9A.40.030;
(d) Forgery, as defined in RCW 9A.60.020 and 9A.60.030;
(e) Theft, as defined in RCW 9A.56.030, 9A.56.040, 9A.56.060,
9A.56.080, and 9A.56.083;
(f) Unlawful sale of subscription television services, as defined
in RCW 9A.56.230;
(g) Theft of telecommunication services or unlawful manufacture of
a telecommunication device, as defined in RCW 9A.56.262 and 9A.56.264;
(h) Child selling or child buying, as defined in RCW 9A.64.030;
(i) Bribery, as defined in RCW 9A.68.010, 9A.68.020, 9A.68.040, and
9A.68.050;
(j) Gambling, as defined in RCW 9.46.220 and 9.46.215 and 9.46.217;
(k) Extortion, as defined in RCW 9A.56.120 and 9A.56.130;
(l) Unlawful production of payment instruments, unlawful possession
of payment instruments, unlawful possession of a personal
identification device, unlawful possession of fictitious
identification, or unlawful possession of instruments of financial
fraud, as defined in RCW 9A.56.320;
(m) Extortionate extension of credit, as defined in RCW 9A.82.020;
(n) Advancing money for use in an extortionate extension of credit,
as defined in RCW 9A.82.030;
(o) Collection of an extortionate extension of credit, as defined
in RCW 9A.82.040;
(p) Collection of an unlawful debt, as defined in RCW 9A.82.045;
(q) Delivery or manufacture of controlled substances or possession
with intent to deliver or manufacture controlled substances under
chapter 69.50 RCW;
(r) Trafficking in stolen property, as defined in RCW 9A.82.050;
(s) Leading organized crime, as defined in RCW 9A.82.060;
(t) Money laundering, as defined in RCW 9A.83.020;
(u) Obstructing criminal investigations or prosecutions in
violation of RCW 9A.72.090, 9A.72.100, 9A.72.110, 9A.72.120, 9A.72.130,
9A.76.070, or 9A.76.180;
(v) Fraud in the purchase or sale of securities, as defined in RCW
21.20.010;
(w) Promoting pornography, as defined in RCW 9.68.140;
(x) Sexual exploitation of children, as defined in RCW 9.68A.040,
9.68A.050, and 9.68A.060;
(y) Promoting prostitution, as defined in RCW 9A.88.070 and
9A.88.080;
(z) Arson, as defined in RCW 9A.48.020 and 9A.48.030;
(aa) Assault, as defined in RCW 9A.36.011 and 9A.36.021;
(bb) Assault of a child, as defined in RCW 9A.36.120 and 9A.36.130;
(cc) A pattern of equity skimming, as defined in RCW 61.34.020;
(dd) Commercial telephone solicitation in violation of RCW
19.158.040(1);
(ee) Trafficking in insurance claims, as defined in RCW 48.30A.015;
(ff) Unlawful practice of law, as defined in RCW 2.48.180;
(gg) Commercial bribery, as defined in RCW 9A.68.060;
(hh) Health care false claims, as defined in RCW 48.80.030;
(ii) Unlicensed practice of a profession or business, as defined in
RCW 18.130.190(7);
(jj) Improperly obtaining financial information, as defined in RCW
9.35.010;
(kk) Identity theft, as defined in RCW 9.35.020;
(ll) Unlawful shipment of cigarettes in violation of RCW
70.155.105(6) (a) or (b);
(mm) Unlawful shipment of cigarettes in violation of RCW
82.24.110(2);
(nn) Unauthorized sale or procurement of telephone records in
violation of RCW 9.26A.140;
(oo) Theft with the intent to resell, as defined in RCW 9A.56.340;
((or))
(pp) Organized retail theft, as defined in RCW 9A.56.350; or
(qq) Mortgage fraud, as defined in section 9 of this act.
(5) "Dealer in property" means a person who buys and sells property
as a business.
(6) "Debtor" means a person to whom an extension of credit is made
or a person who guarantees the repayment of an extension of credit or
in any manner undertakes to indemnify the creditor against loss
resulting from the failure of a person to whom an extension is made to
repay the same.
(7) "Documentary material" means any book, paper, document,
writing, drawing, graph, chart, photograph, phonograph record, magnetic
tape, computer printout, other data compilation from which information
can be obtained or from which information can be translated into usable
form, or other tangible item.
(8) "Enterprise" includes any individual, sole proprietorship,
partnership, corporation, business trust, or other profit or nonprofit
legal entity, and includes any union, association, or group of
individuals associated in fact although not a legal entity, and both
illicit and licit enterprises and governmental and nongovernmental
entities.
(9) "Extortionate extension of credit" means an extension of credit
with respect to which it is the understanding of the creditor and the
debtor at the time the extension is made that delay in making repayment
or failure to make repayment could result in the use of violence or
other criminal means to cause harm to the person, reputation, or
property of any person.
(10) "Extortionate means" means the use, or an express or implicit
threat of use, of violence or other criminal means to cause harm to the
person, reputation, or property of any person.
(11) "Financial institution" means any bank, trust company, savings
and loan association, savings bank, mutual savings bank, credit union,
or loan company under the jurisdiction of the state or an agency of the
United States.
(12) "Pattern of criminal profiteering activity" means engaging in
at least three acts of criminal profiteering, one of which occurred
after July 1, 1985, and the last of which occurred within five years,
excluding any period of imprisonment, after the commission of the
earliest act of criminal profiteering. In order to constitute a
pattern, the three acts must have the same or similar intent, results,
accomplices, principals, victims, or methods of commission, or be
otherwise interrelated by distinguishing characteristics including a
nexus to the same enterprise, and must not be isolated events.
However, in any civil proceedings brought pursuant to RCW 9A.82.100 by
any person other than the attorney general or county prosecuting
attorney in which one or more acts of fraud in the purchase or sale of
securities are asserted as acts of criminal profiteering activity, it
is a condition to civil liability under RCW 9A.82.100 that the
defendant has been convicted in a criminal proceeding of fraud in the
purchase or sale of securities under RCW 21.20.400 or under the laws of
another state or of the United States requiring the same elements of
proof, but such conviction need not relate to any act or acts asserted
as acts of criminal profiteering activity in such civil action under
RCW 9A.82.100.
(13) "Real property" means any real property or interest in real
property, including but not limited to a land sale contract, lease, or
mortgage of real property.
(14) "Records" means any book, paper, writing, record, computer
program, or other material.
(15) "Repayment of an extension of credit" means the repayment,
satisfaction, or discharge in whole or in part of a debt or claim,
acknowledged or disputed, valid or invalid, resulting from or in
connection with that extension of credit.
(16) "Stolen property" means property that has been obtained by
theft, robbery, or extortion.
(17) "To collect an extension of credit" means to induce in any way
a person to make repayment thereof.
(18) "To extend credit" means to make or renew a loan or to enter
into an agreement, tacit or express, whereby the repayment or
satisfaction of a debt or claim, whether acknowledged or disputed,
valid or invalid, and however arising, may or shall be deferred.
(19) "Traffic" means to sell, transfer, distribute, dispense, or
otherwise dispose of stolen property to another person, or to buy,
receive, possess, or obtain control of stolen property, with intent to
sell, transfer, distribute, dispense, or otherwise dispose of the
property to another person.
(20)(a) "Trustee" means:
(i) A person acting as a trustee under a trust established under
Title 11 RCW in which the trustee holds legal or record title to real
property;
(ii) A person who holds legal or record title to real property in
which another person has a beneficial interest; or
(iii) A successor trustee to a person who is a trustee under (a)(i)
or (ii) of this subsection.
(b) "Trustee" does not mean a person appointed or acting as:
(i) A personal representative under Title 11 RCW;
(ii) A trustee of any testamentary trust;
(iii) A trustee of any indenture of trust under which a bond is
issued; or
(iv) A trustee under a deed of trust.
(21) "Unlawful debt" means any money or other thing of value
constituting principal or interest of a debt that is legally
unenforceable in the state in full or in part because the debt was
incurred or contracted:
(a) In violation of any one of the following:
(i) Chapter 67.16 RCW relating to horse racing;
(ii) Chapter 9.46 RCW relating to gambling;
(b) In a gambling activity in violation of federal law; or
(c) In connection with the business of lending money or a thing of
value at a rate that is at least twice the permitted rate under the
applicable state or federal law relating to usury.
NEW SECTION. Sec. 25 Sections 1 through 13 of this act
constitute a new chapter in Title