CERTIFICATION OF ENROLLMENT

HOUSE BILL 1270

Chapter 208, Laws of 2007

60th Legislature
2007 Regular Session



CONSUMER LOAN ACT--LOAN DURATION



EFFECTIVE DATE: 07/22/07

Passed by the House February 28, 2007
  Yeas 96   Nays 0

FRANK CHOPP
________________________________________    
Speaker of the House of Representatives


Passed by the Senate April 12, 2007
  Yeas 48   Nays 0


BRAD OWEN
________________________________________    
President of the Senate
 
CERTIFICATE

I, Richard Nafziger, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is HOUSE BILL 1270 as passed by the House of Representatives and the Senate on the dates hereon set forth.


RICHARD NAFZIGER
________________________________________    
Chief Clerk
Approved April 27, 2007, 2:14 p.m.








CHRISTINE GREGOIRE
________________________________________    
Governor of the State of Washington
 
FILED
April 30, 2007







Secretary of State
State of Washington


_____________________________________________ 

HOUSE BILL 1270
_____________________________________________

Passed Legislature - 2007 Regular Session
State of Washington60th Legislature2007 Regular Session

By Representatives Kirby, Roach and Moeller

Read first time 01/16/2007.   Referred to Committee on Insurance, Financial Service & Consumer Protection.



     AN ACT Relating to the duration period of loans made under the consumer loan act; and amending RCW 31.04.125.

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

Sec. 1   RCW 31.04.125 and 1995 c 9 s 1 are each amended to read as follows:
     (1) ((No licensee may make a loan with a repayment period greater than six years and fifteen days after the loan origination date except for open-end loans or loans secured by real estate or personal property used as a residence.
     (2)
)) No licensee may make a loan using any method of calculating interest other than the simple interest method; except that the add-on method of calculating interest may be used for a loan not secured by real property or personal property used as a residence when the repayment period does not exceed three years and fifteen days after the loan origination date.
     (((3))) (2) No licensee may make a loan using the add-on method to calculate interest that does not provide for a refund to the borrower or a credit to the borrower's account of any unearned interest when the loan is repaid before the original maturity date in full by cash, by a new loan, by refinancing, or otherwise before the final due date. The refund must be calculated using the actuarial method, unless a sum equal to two or more installments has been prepaid and the account is not in arrears and continues to be paid ahead, in which case the interest on the account must be recalculated by the simple interest method with the refund of unearned interest made as if the loan had been made using the simple interest method. When computing an actuarial refund, the lender may round the annual rate used to the nearest quarter of one percent.
     In computing a required refund of unearned interest, a prepayment made on or before the fifteenth day after the scheduled payment date is deemed to have been made on the payment date preceding the prepayment. In the case of prepayment before the first installment due date, the company may retain an amount not to exceed one-thirtieth of the first month's interest charge for each day between the origination date of the loan and the actual date of prepayment.
     (((4))) (3) No licensee may provide credit life or disability insurance in an amount greater than that required to pay off the total balance owing on the date of the borrower's death net of refunds in the case of credit life insurance, or all minimum payments that become due on the loan during the covered period of disability in the case of credit disability insurance. The lender may not require any such insurance.
     (((5))) (4) Except in the case of loans by mail, where the borrower has sufficient time to review papers before returning them, no licensee may prepare loan papers in advance of the loan closing without having reviewed with the borrower the terms and conditions of the loan to include the type and amount of insurance, if any, requested by the borrower.


         Passed by the House February 28, 2007.
         Passed by the Senate April 12, 2007.
         Approved by the Governor April 27, 2007.
         Filed in Office of Secretary of State April 30, 2007.