BILL REQ. #: H-0590.1
|State of Washington||62nd Legislature||2011 Regular Session|
Read first time 01/28/11. Referred to Committee on Business & Financial Services.
AN ACT Relating to eliminating the cap on the total number of small loans a borrower may have in a twelve-month period; and amending RCW 31.45.073.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 31.45.073 and 2009 c 510 s 3 are each amended to read
(1) No licensee may engage in the business of making small loans without first obtaining a small loan endorsement to its license from the director in accordance with this chapter. An endorsement will be required for each location where a licensee engages in the business of making small loans, but a small loan endorsement may authorize a licensee to make small loans at a location different than the licensed locations where it cashes or sells checks. A licensee may have more than one endorsement.
(2) A licensee must set the due date of a small loan on or after the date of the borrower's next pay date. If a borrower's next pay date is within seven days of taking out the loan, a licensee must set the due date of a small loan on or after the borrower's second pay date after the date the small loan is made. The termination date of a small loan may not exceed the origination date of that same small loan by more than forty-five days, including weekends and holidays, unless the term of the loan is extended by agreement of both the borrower and the licensee and no additional fee or interest is charged. The maximum principal amount of any small loan, or the outstanding principal balances of all small loans made by all licensees to a single borrower at any one time, may not exceed seven hundred dollars or thirty percent of the gross monthly income of the borrower, whichever is lower. A licensee is prohibited from making a small loan to a borrower who is in default on another small loan until after that loan is paid in full or two years have passed from the origination date of the small loan, whichever occurs first.
(3) A licensee is prohibited from making a small loan to a borrower in an installment plan with any licensee until after the plan is paid in full or two years have passed from the origination date of the installment plan, whichever occurs first.
A borrower is prohibited from receiving more than eight small
loans from all licensees in any twelve-month period. A licensee is
prohibited from making a small loan to a borrower if making that small
loan would result in a borrower receiving more than eight small loans
from all licensees in any twelve-month period.)) A licensee that has obtained the required small loan
endorsement may charge interest or fees for small loans not to exceed
in the aggregate fifteen percent of the first five hundred dollars of
principal. If the principal exceeds five hundred dollars, a licensee
may charge interest or fees not to exceed in the aggregate ten percent
of that portion of the principal in excess of five hundred dollars. If
a licensee makes more than one loan to a single borrower, and the
aggregated principal of all loans made to that borrower exceeds five
hundred dollars at any one time, the licensee may charge interest or
fees not to exceed in the aggregate ten percent on that portion of the
aggregated principal of all loans at any one time that is in excess of
five hundred dollars. The director may determine by rule which fees,
if any, are not subject to the interest or fee limitations described in
this section. It is a violation of this chapter for any licensee to
knowingly loan to a single borrower at any one time, in a single loan
or in the aggregate, more than the maximum principal amount described
in this section.
(6))) (5) In connection with making a small loan, a licensee may
advance moneys on the security of a postdated check. The licensee may
not accept any other property, title to property, or other evidence of
ownership of property as collateral for a small loan. The licensee may
accept only one postdated check per loan as security for the loan. A
licensee may permit a borrower to redeem a postdated check with a
payment of cash or the equivalent of cash. The licensee may disburse
the proceeds of a small loan in cash, in the form of a check, or in the
form of the electronic equivalent of cash or a check.
(7))) (6) No person may at any time cash or advance any moneys on
a postdated check or draft in excess of the amount of goods or services
purchased without first obtaining a small loan endorsement to a check
casher or check seller license.