PROPOSED RULES
FINANCIAL INSTITUTIONS
Original Notice.
Preproposal statement of inquiry was filed as WSR 02-06-016.
Title of Rule: WAC 208-620-160 Requirements for advertising materials.
Purpose: To prohibit unfair and deceptive advertising and solicitation practices by mortgage brokers and mortgage lenders to residents of Washington state.
Statutory Authority for Adoption: RCW 31.04.165.
Statute Being Implemented: Chapter 208-620 WAC.
Summary: The proposed rule:
1. Clarifies the name under which a licensee can advertise.
2. Requires certain disclosures when a borrower's information is used in a solicitation or advertisement.
3. Provides clarification of unfair and deceptive solicitation and advertising practices.
Reasons Supporting Proposal: The proposed amendments are in response to an increasing number of deceptive loan solicitations from mortgage lenders and mortgage brokers advertising loan products to residents of Washington state.
Name of Agency Personnel Responsible for Drafting: Nicole Scott/Mark Thomson, GA Building, Room #300, 902-8811/8787; Implementation and Enforcement: Mark Thomson, GA Building, Room #300, 902-8787.
Name of Proponent: Department of Financial Institutions, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rule:
1. Clarifies the name under which a licensee can advertise.
2. Requires certain disclosures when a borrower's information is used in a solicitation or advertisement.
3. Provides clarification of unfair and deceptive solicitation and advertising practices.
Purpose: To prohibit unfair and deceptive advertising and solicitation practices by mortgage brokers and mortgage lenders to residents of Washington state.
Anticipated effects:
1. Provide guidance to licensees and the department regarding the standards for solicitations and advertisements.
2. Protect residents of Washington state against unfair and deceptive advertising and solicitation practices.
Proposal Changes the Following Existing Rules: The proposed rule:
1. Amends WAC section by clarifying the name under which a licensee can advertise.
2. Amends WAC section by requiring certain disclosures when a borrower's information is used in a solicitation or advertisement.
3. Amends WAC section by providing clarification of unfair and deceptive solicitation and advertising practices.
4. Amends WAC section by changing the length of time a licensee must maintain a copy of all advertising records from two years to twenty-five months in accordance with RCW 31.04.155.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed amendment will not have significant economic impact on the affected small businesses licensed under the statute.
RCW 34.05.328 does not apply to this rule adoption. Department of Financial Institutions is not a listed agency under RCW 34.05.328.
Hearing Location: Department of Information Services, DIS Participating Sites: Lacey, Seattle, Spokane, Tri-Cities and Vancouver, on August 14, 2002, at 11:30 - 12:00 noon.
Assistance for Persons with Disabilities: Contact Mark Thomson by August 9, 2002, TDD (360) 664-8126.
Submit Written Comments to: Mark Thomson, Director of Consumer Services, P.O. Box 41200, Olympia, WA 98504-1200, fax (360) 704-6925, by August 7, 2002.
Date of Intended Adoption: August 14, 2002.
May 22, 2002
Mark Thomson
Acting Director
OTS-5679.1
AMENDATORY SECTION(Amending WSR 96-04-013, filed 1/26/96,
effective 2/26/96)
WAC 208-620-160
Advertising -- Restrictions and requirements.
(1) A licensee shall advertise only under the name or names on
its license.
(2) When an advertisement includes information about a consumer's current loan that did not come from a solicitation, application, or loan made or purchased by the licensee, the licensee shall provide to the consumer the name of the source from which this information was obtained.
(3) It is an unfair and deceptive act or practice and a violation of RCW 31.04.027 for a licensee to solicit using advertising that includes:
(a) An envelope or stationary that contains an official-looking emblem, such as an eagle or a crest, or that is otherwise designed to resemble an official government mailing, such as a mailing from the Internal Revenue Service or the U.S. Department of the Treasury;
(b) An envelope or stationary containing warnings or notices citing codes or form numbers made to appear like government codes or form numbers that are not required to be shown on the mailing by the U.S. Postal Service;
(c) Any suggestion or representation that the licensee is, or is affiliated with, a state or federal agency, municipality, bank, savings bank, trust company, savings and loan association, building and loan association, credit union, or other entity that it does not actually represent;
(d) Any suggestion or representation that the solicitation is from an entity other than the licensee;
(e) Any suggestion or representation that the information about a consumer's current loan was provided by any source other than the source disclosed pursuant to subsection (2) of this section.
(4) A licensee shall maintain a copy of all advertising for
a period of ((two years)) twenty-five months at a location
approved by the director. Such copies shall include newspaper
and print advertising, scripts of radio and television
advertising, telemarketing scripts, all direct mail advertising,
and any advertising distributed directly by delivery, facsimile
or computer network.
[Statutory Authority: RCW 43.320.040, 31.04.045, [31.04].105, [31.04].145, [31.04].155 and [31.04].165. 96-04-013, recodified as § 208-620-160, filed 1/26/96, effective 2/26/96. Statutory Authority: 1991 c 208 § 17. 91-22-035, § 50-20-140, filed 10/30/91, effective 1/1/92.]