| Passed by the House February 28, 2007 Yeas 96 FRANK CHOPP ________________________________________ Speaker of the House of Representatives Passed by the Senate April 12, 2007 Yeas 48 BRAD OWEN ________________________________________ President of the Senate | 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 | April 30, 2007 Secretary of State State of Washington |
| State of Washington | 60th Legislature | 2007 Regular Session |
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.)) 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.
(2)
(((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.