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ENGROSSED HOUSE BILL 1411
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State of Washington 55th Legislature 1997 Regular Session
By Representatives L. Thomas, Grant, Zellinsky, DeBolt and Benson
Read first time 01/24/97. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to authorizing the collection of fees in connection with making consumer loans; amending RCW 31.04.105; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 31.04.105 and 1994 c 92 s 167 are each amended to read as follows:
Every licensee may:
(1) Lend money at a rate that does not exceed twenty-five percent per annum as determined by the simple interest method of calculating interest owed;
(2)(a)(i) Until June 30, 2002, in connection with the making of a loan that is secured primarily by real estate, charge the borrower a nonrefundable loan origination fee, which may be included in the principal balance of the loan;
(ii) After June 30, 2002, in connection with the making of a loan that is secured primarily by real estate, charge the borrower a nonrefundable loan origination fee not to exceed four percent of the first twenty thousand dollars and two percent thereafter of the principal amount of the loan advanced to or for the direct benefit of the borrower, which fee may be included in the principal balance of the loan;
(b)
In connection with the making of a loan that is not secured primarily by
real estate, charge the borrower a nonrefundable((, prepaid,)) loan
origination fee not to exceed four percent of the first twenty thousand dollars
and two percent thereafter of the principal amount of the loan advanced to or
for the direct benefit of the borrower, which fee may be included in the
principal balance of the loan;
(3)
Agree with the borrower for the payment of fees ((for title insurance,
appraisals, recording, reconveyance, and releasing)) to third parties
who provide goods or services in connection with the preparation of the
borrower's loan, including, but not limited to, credit reporting agencies,
title companies, appraisers, structural and pest inspectors, and escrow
companies, when such fees are actually paid by the licensee to a third
party for such services or purposes and may include such fees in the amount of
the loan. However, no charge may be collected unless a loan is made, except
for reasonable fees properly incurred in connection with the appraisal of
property by a qualified, independent, professional, third-party appraiser
selected by the borrower and approved by the lender or in the absence of
borrower selection, selected by the lender;
(4) Charge and collect a penalty of ten cents or less on each dollar of any installment payment delinquent ten days or more;
(5) Collect from the debtor reasonable attorneys' fees, actual expenses, and costs incurred in connection with the collection of a delinquent debt, a repossession, or a foreclosure when a debt is referred for collection to an attorney who is not a salaried employee of the licensee;
(6) Make open-end loans as provided in this chapter;
(7) Charge and collect a fee for dishonored checks in an amount approved by the director; and
(8) In accordance with Title 48 RCW, sell insurance covering real and personal property, covering the life or disability or both of the borrower, and covering the involuntary unemployment of the borrower.
NEW SECTION. Sec. 2. The department of financial institutions shall monitor the impact on consumers of removing the origination fee limit for real estate loans under this act, particularly the relationship between the interest rate charged and origination fees. The department shall report to the financial institutions committees of the legislature by October 1, 2001.
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