S-4146               _______________________________________________

                                                   SENATE BILL NO. 6548

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

By Senators Nelson and Rinehart

Read first time 1/17/90 and referred to Committee on  Law & Justice.

AN ACT Relating to credit agreements; adding new sections to chapter 19.36 RCW; and providing an effective date.

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

NEW SECTION. Sec. 1.     "Credit agreement" means an agreement, promise, or commitment to lend money, to otherwise extend credit, to forbear with respect to the repayment of any debt or the exercise of any remedy, to modify or amend the terms under which the creditor has lent money or otherwise extended credit, to release any guarantor or consigner, or to make any other financial accommodation pertaining to a debt or other extension of credit.

NEW SECTION. Sec. 2.     Sections 1 through 6 of this act shall not apply to:  (1) A promise, agreement, undertaking, document, or commitment relating to a credit card or charge card; or (2) a loan of money or extension of credit to a natural person that is primarily for personal, family, or household purposes and not primarily for investment, business, agricultural, or commercial purposes.

NEW SECTION. Sec. 3.     A credit agreement is not enforceable against the creditor unless the agreement is in writing and signed by the creditor.  The rights and obligations of the parties to a credit agreement shall be determined solely from the written agreement, and any prior or contemporaneous oral agreements between the parties are superseded by, merged into, and may not vary the credit agreement.  Partial performance of a credit agreement does not remove the agreement from the operation of this section.

NEW SECTION. Sec. 4.     If a notice complying with section 5 of this act, is not given simultaneously with or before a credit agreement is made, sections 1 through 6 of this act shall not apply to the credit agreement.  Notice, once given to a debtor, shall be effective as to all subsequent credit agreements and effective against the debtor, and its guarantors, successors, and assigns.

NEW SECTION. Sec. 5.     The creditor shall give notice to the other party on a separate document or incorporated into one or more of the documents relating to a credit agreement.  The notice shall be in type that is bold face, capitalized, underlined, or otherwise set out from surrounding written materials so it is conspicuous.  The notice shall state substantially the following:

Oral agreements or oral commitments to loan money, extend credit, or to forbear from enforcing repayment of a debt are not enforceable under Washington law.

NEW SECTION. Sec. 6.     Sections 1 through 5 of this act shall take effect July 1, 1990, and shall apply only to credit agreements entered into on or after July 1, 1990.

NEW SECTION. Sec. 7.     Sections 1 through 5 of this act are each added to chapter 19.36 RCW.