CERTIFICATION OF ENROLLMENT

SECOND SUBSTITUTE HOUSE BILL 1405

Chapter 191, Laws of 2011

62nd Legislature
2011 Regular Session



CONSUMER LOAN ACT--LOANS



EFFECTIVE DATE: 07/22/11

Passed by the House April 14, 2011
  Yeas 97   Nays 0

FRANK CHOPP
________________________________________    
Speaker of the House of Representatives


Passed by the Senate April 9, 2011
  Yeas 47   Nays 2


BRAD OWEN
________________________________________    
President of the Senate
 
CERTIFICATE

I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SECOND SUBSTITUTE HOUSE BILL 1405 as passed by the House of Representatives and the Senate on the dates hereon set forth.


BARBARA BAKER
________________________________________    
Chief Clerk
Approved April 29, 2011, 3:27 p.m.








CHRISTINE GREGOIRE
________________________________________    
Governor of the State of Washington
 
FILED
April 29, 2011







Secretary of State
State of Washington


_____________________________________________ 

SECOND SUBSTITUTE HOUSE BILL 1405
_____________________________________________

AS AMENDED BY THE SENATE

Passed Legislature - 2011 Regular Session
State of Washington62nd Legislature2011 Regular Session

By House General Government Appropriations & Oversight (originally sponsored by Representatives Kirby, Kelley, Ladenburg, Darneille, Ryu, Stanford, and Jinkins)

READ FIRST TIME 02/22/11.   



     AN ACT Relating to loans made under the consumer loan act; amending RCW 31.04.027; and reenacting and amending RCW 31.04.025.

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

Sec. 1   RCW 31.04.025 and 2009 c 311 s 1 and 2009 c 120 s 3 are each reenacted and amended to read as follows:
     (1) Each loan made to a resident of this state by a licensee, or persons subject to this chapter, is subject to the authority and restrictions of this chapter, unless such loan is made under the authority of chapter 63.14 RCW.
     (2) This chapter does not apply to the following:
     (a) Any person doing business under, and as permitted by, any law of this state or of the United States relating to banks, savings banks, trust companies, savings and loan or building and loan associations, or credit unions;
     (b) Entities making loans under chapter 19.60 RCW (pawnbroking);
     (c) Entities making loans under chapter 63.14 RCW (retail installment sales of goods and services);
     (d) Entities making loans under chapter 31.45 RCW (check cashers and sellers);
     (e) Any person making ((loans)) a loan primarily for business, commercial, or agricultural purposes((, or)) unless the loan is secured by a lien on the borrower's primary residence;
     (f) Any person
making loans made to government or government agencies or instrumentalities((,)) or making loans to organizations as defined in the federal truth in lending act;
     (((f))) (g) Entities making loans under chapter 43.185 RCW (housing trust fund);
     (((g))) (h) Entities making loans under programs of the United States department of agriculture, department of housing and urban development, or other federal government program that provides funding or access to funding for single-family housing developments or grants to low-income individuals for the purchase or repair of single-family housing; ((and
     (h)
)) (i) Nonprofit housing organizations making loans, or loans made, under housing programs that are funded in whole or in part by federal or state programs if the primary purpose of the programs is to assist low-income borrowers with purchasing or repairing housing or the development of housing for low-income Washington state residents; and
     (j)
Entities making loans which are not residential mortgage loans under a credit card plan.
     (3) The director may, at his or her discretion, waive applicability of the consumer loan company licensing provisions of this chapter to other persons, not including individuals subject to the S.A.F.E. act, making or servicing loans when the director determines it necessary to facilitate commerce and protect consumers. The director may adopt rules interpreting this section.

Sec. 2   RCW 31.04.027 and 2001 c 81 s 3 are each amended to read as follows:
     It is a violation of this chapter for a licensee, its officers, directors, employees, or independent contractors, or any other person subject to this chapter to:
     (1) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead any borrower, to defraud or mislead any lender, or to defraud or mislead any person;
     (2) Directly or indirectly engage in any unfair or deceptive practice toward any person;
     (3) Directly or indirectly obtain property by fraud or misrepresentation;
     (4) Solicit or enter into a contract with a borrower that provides in substance that the consumer loan company may earn a fee or commission through the consumer loan company's best efforts to obtain a loan even though no loan is actually obtained for the borrower;
     (5) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;
     (6) Fail to make disclosures to loan applicants as required by RCW 31.04.102 and any other applicable state or federal law;
     (7) Make, in any manner, any false or deceptive statement or representation with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan or engage in bait and switch advertising;
     (8) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any reports filed with the department by a licensee or in connection with any investigation conducted by the department;
     (9) Make any payment, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property; ((or))
     (10) Accept from any borrower at or near the time a loan is made and in advance of any default an execution of, or induce any borrower to execute, any instrument of conveyance, not including a mortgage or deed of trust, to the lender of any ownership interest in the borrower's primary residence that is the security for the borrower's loan;
     (11) Obtain at the time of closing a release of future damages for usury or other damages or penalties provided by law or a waiver of the provisions of this chapter; or
     (12)
Advertise any rate of interest without conspicuously disclosing the annual percentage rate implied by that rate of interest or otherwise fail to comply with any requirement of the truth in lending act, 15 U.S.C. Sec. 1601 and regulation Z, 12 C.F.R. Sec. 226, the real estate settlement procedures act, 12 U.S.C. Sec. 2601 and regulation X, 24 C.F.R. Sec. 3500, or the equal credit opportunity act, 15 U.S.C. Sec. 1691 and regulation B, Sec. 202.9, 202.11, and 202.12, or any other applicable federal statute, as now or hereafter amended, in any advertising of residential mortgage loans or any other consumer loan company activity.


         Passed by the House April 14, 2011.
         Passed by the Senate April 9, 2011.
         Approved by the Governor April 29, 2011.
         Filed in Office of Secretary of State April 29, 2011.