AN ACT Relating to small loans and small consumer installment loans; amending RCW 31.45.010, 31.45.020, 31.45.030, 31.45.040, 31.45.050, 31.45.060, 31.45.070, 31.45.090, 31.45.100, 31.45.105, 31.45.110, 31.45.150, 31.45.180, 31.45.190, and 31.45.200; adding new sections to chapter 31.45 RCW; creating new sections; repealing RCW 31.45.073, 31.45.077, 31.45.079, 31.45.082, 31.45.084, 31.45.085, 31.45.086, 31.45.088, 31.45.093, 31.45.095, and 31.45.210; prescribing penalties; providing an effective date; and providing a contingent effective date.

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

CHECK CASHERS AND SELLERS

Sec. 1.  RCW 31.45.010 and 2012 c 17 s 7 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this ((chapter)) subchapter.

(1) "Applicant" means a person that files an application for a license under this ((chapter)) subchapter, including the applicant's sole proprietor, owners, directors, officers, partners, members, and controlling persons.

(2) (("Borrower" means a natural person who receives a small loan.

(4))) "Check" means the same as defined in RCW 62A.3-104(f) and, for purposes of conducting the business of making small loans, includes other electronic forms of payment, including stored value cards, internet transfers, and automated clearinghouse transactions.

(((5))) (3) "Check casher" means an individual, partnership, unincorporated association, or corporation that, for compensation, engages, in whole or in part, in the business of cashing checks, drafts, money orders, or other commercial paper serving the same purpose.

(((6))) (4) "Check seller" means an individual, partnership, unincorporated association, or corporation that, for compensation, engages, in whole or in part, in the business of or selling checks, drafts, money orders, or other commercial paper serving the same purpose.

(8))) (5) "Controlling person" means a person owning or controlling ten percent or more of the total outstanding shares of the applicant or licensee, if the applicant or licensee is a corporation, and a member who owns ten percent or more of a limited liability company or limited liability partnership.

(10))) (6) "Department" means the department of financial institutions.

(7) "Director" means the director of financial institutions.

(((11))) (8) "Financial institution" means a commercial bank, savings bank, savings and loan association, or credit union.

(13))) (9) "Licensee" means a check casher or seller licensed by the director to engage in business in accordance with this ((chapter)) subchapter. "Licensee" also means a check casher or seller, whether located within or outside of this state, who fails to obtain the license ((or small loan endorsement)) required by this ((chapter)) subchapter.

(18))) (10) "Person" means an individual, partnership, association, limited liability company, limited liability partnership, trust, corporation, and any other legal entity.

(((19))) (11) "Principal" means the loan proceeds advanced for the benefit of the borrower in a small loan, excluding any fee or interest charge.

(21))) (12) "Small loan" means a loan of up to the maximum amount and for a period of time up to the maximum term specified in RCW 31.45.073.

Sec. 2.  RCW 31.45.020 and 2003 c 86 s 2 are each amended to read as follows:

(1) This ((chapter)) subchapter does not apply to:

(a) Any financial institution or trust company authorized to do business in Washington;

(b) The cashing of checks, drafts, or money orders by any person who cashes checks, drafts, or money orders as a convenience, as a minor part of its customary business, and not for profit;

(c) The issuance or sale of checks, drafts, or money orders by any corporation, partnership, or association that has a net worth of not less than three million dollars as shown by audited financial statements; and

(d) The issuance or sale of checks, drafts, money orders, or other commercial paper serving the same purpose by any agent of a corporation, partnership, or association described in (c) of this subsection.

(2) Upon application to the director, the director may exempt a person from any or all provisions of this ((chapter)) subchapter upon a finding by the director that although not otherwise exempt under this section, the applicant is not primarily engaged in the business of cashing or selling checks and a total or partial exemption would not be detrimental to the public.

Sec. 3.  RCW 31.45.030 and 2005 c 274 s 255 are each amended to read as follows:

(1) Except as provided in RCW 31.45.020, no check casher or seller may engage in business without first obtaining a license from the director in accordance with this ((chapter)) subchapter. A license is required for each location where a licensee engages in the business of cashing or selling checks or drafts.

(2) Each application for a license shall be in writing in a form prescribed by the director and shall contain the following information:

(a) The legal name, residence, and business address of the applicant and, if the applicant is a partnership, association, or corporation, of every member, officer, and director thereof;

(b) The location where the initial registered office of the applicant will be located in this state;

(c) The complete address of any other locations at which the applicant proposes to engage in business as a check casher or seller; and

(d) Such other data, financial statements, and pertinent information as the director may require with respect to the applicant, its directors, trustees, officers, members, or agents.

(3) Any information in the application regarding the personal residential address or telephone number of the applicant, and any trade secret as defined in RCW 19.108.010 including any financial statement that is a trade secret, is exempt from the public records disclosure requirements of chapter 42.56 RCW.

(4) The application shall be filed together with an investigation and supervision fee established by rule by the director. Such fees collected shall be deposited to the credit of the financial services regulation fund in accordance with RCW 43.320.110.

(5)(a) Before granting a license to sell checks, drafts, or money orders under this ((chapter)) subchapter, the director shall require that the licensee file with the director a surety bond running to the state of Washington, which bond shall be issued by a surety insurer which meets the requirements of chapter 48.28 RCW, and be in a format acceptable to the director. The director shall adopt rules to determine the penal sum of the bond that shall be filed by each licensee. The bond shall be conditioned upon the licensee paying all persons who purchase checks, drafts, or money orders from the licensee the face value of any check, draft, or money order which is dishonored by the drawee bank, savings bank, or savings and loan association due to insufficient funds or by reason of the account having been closed. The bond shall only be liable for the face value of the dishonored check, draft, or money order, and shall not be liable for any interest or consequential damages.

(b) ((Before granting a small loan endorsement under this chapter, the director shall require that the licensee file with the director a surety bond, in a format acceptable to the director, issued by a surety insurer that meets the requirements of chapter 48.28 RCW. The director shall adopt rules to determine the penal sum of the bond that shall be filed by each licensee. A licensee who wishes to engage in both check selling and making small loans may combine the penal sums of the bonding requirements and file one bond in a form acceptable to the director. The bond shall run to the state of Washington as obligee, and shall run to the benefit of the state and any person or persons who suffer loss by reason of the licensee's violation of this chapter or any rules adopted under this chapter. The bond shall only be liable for damages suffered by borrowers as a result of the licensee's violation of this chapter or rules adopted under this chapter, and shall not be liable for any interest or consequential damages.

(c))) The bond shall be continuous and may be canceled by the surety upon the surety giving written notice to the director and licensee of its intent to cancel the bond. The cancellation is effective thirty days after the notice is received by the director. Whether or not the bond is renewed, continued, reinstated, reissued, or otherwise extended, replaced, or modified, including increases or decreases in the penal sum, it shall be considered one continuous obligation, and the surety upon the bond shall not be liable in an aggregate or cumulative amount exceeding the penal sum set forth on the face of the bond. In no event shall the penal sum, or any portion thereof, at two or more points in time be added together in determining the surety's liability. The bond shall not be liable for any liability of the licensee for tortious acts, whether or not such liability is imposed by statute or common law, or is imposed by contract. The bond shall not be a substitute or supplement to any liability or other insurance required by law or by the contract. If the surety desires to make payment without awaiting court action against it, the penal sum of the bond shall be reduced to the extent of any payment made by the surety in good faith under the bond.

(((d))) (c) Any person who is a purchaser of a check, draft, or money order from the licensee having a claim against the licensee for the dishonor of any check, draft, or money order by the drawee bank, savings bank, or savings and loan association due to insufficient funds or by reason of the account having been closed, or who obtained a small loan from the licensee and was damaged by the licensee's violation of this ((chapter)) subchapter or rules adopted under this ((chapter)) subchapter, may bring suit upon such bond or deposit in the superior court of the county in which the check, draft, or money order was purchased, or in the superior court of a county in which the licensee maintains a place of business. Jurisdiction shall be exclusively in the superior court. Any such action must be brought not later than one year after the dishonor of the check, draft, or money order on which the claim is based. In the event valid claims against a bond or deposit exceed the amount of the bond or deposit, each claimant shall only be entitled to a pro rata amount, based on the amount of the claim as it is valid against the bond, or deposit, without regard to the date of filing of any claim or action.

(((e))) (d) In lieu of the surety bond required by this section, the applicant for a check seller license may file with the director a deposit consisting of cash or other security acceptable to the director in an amount equal to the penal sum of the required bond. ((In lieu of the surety bond required by this section, the applicant for a small loan endorsement may file with the director a deposit consisting of cash or other security acceptable to the director in an amount equal to the penal sum of the required bond, or may demonstrate to the director net worth in excess of three times the amount of the penal sum of the required bond.))

The director may adopt rules necessary for the proper administration of the security or to establish reporting requirements to ensure that the net worth requirements continue to be met. A deposit given instead of the bond required by this section is not an asset of the licensee for the purpose of complying with the liquid asset provisions of this ((chapter)) subchapter. A deposit given instead of the bond required by this section is a fund held in trust for the benefit of eligible claimants under this section and is not an asset of the estate of any licensee that seeks protection voluntarily or involuntarily under the bankruptcy laws of the United States.

(((f))) (e) Such security may be sold by the director at public auction if it becomes necessary to satisfy the requirements of this ((chapter)) subchapter. Notice of the sale shall be served upon the licensee who placed the security personally or by mail. If notice is served by mail, service shall be addressed to the licensee at its address as it appears in the records of the director. Bearer bonds of the United States or the state of Washington without a prevailing market price must be sold at public auction. Such bonds having a prevailing market price may be sold at private sale not lower than the prevailing market price. Upon any sale, any surplus above amounts due shall be returned to the licensee, and the licensee shall deposit with the director additional security sufficient to meet the amount required by the director. A deposit given instead of the bond required by this section shall not be deemed an asset of the licensee for the purpose of complying with the liquid asset provisions of this ((chapter)) subchapter.

Sec. 4.  RCW 31.45.040 and 2003 c 86 s 4 are each amended to read as follows:

(1) The director shall conduct an investigation of every applicant to determine the financial responsibility, experience, character, and general fitness of the applicant. The director shall issue the applicant a license to engage in the business of cashing or selling checks, or both, ((or a small loan endorsement,)) if the director determines to his or her satisfaction that:

(a) The applicant has satisfied the requirements of RCW 31.45.030;

(b) The applicant is financially responsible and appears to be able to conduct the business of cashing or selling checks ((or making small loans)) in an honest, fair, and efficient manner with the confidence and trust of the community; and

(c) The applicant has the required bonds, or has provided an acceptable alternative form of financial security.

(2) The director may refuse to issue a license ((or small loan endorsement)) if he or she finds that the applicant, or any person who is a director, officer, partner, agent, sole proprietor, owner, or controlling person of the applicant, has been convicted of a felony in any jurisdiction within seven years of filing the present application or is associating or consorting with any person who has been convicted of a felony in any jurisdiction within seven years of filing the present application. The term "substantial stockholder" as used in this subsection, means a person owning or controlling ten percent or more of the total outstanding shares of the applicant corporation.

(3) A license ((or small loan endorsement)) may not be issued to an applicant:

(a) Whose license to conduct business under this ((chapter)) subchapter, or any similar statute in any other jurisdiction, has been suspended or revoked within five years of the filing of the present application;

(b) Who has been banned from the industry by an administrative order issued by the director or the director's designee, for the period specified in the administrative order; or

(c) When any person who is a sole proprietor, owner, director, officer, partner, agent, or controlling person of the applicant has been banned from the industry in an administrative order issued by the director, for the period specified in the administrative order.

(4) A license ((or small loan endorsement)) issued under this ((chapter)) subchapter shall be conspicuously posted in the place of business of the licensee. The license is not transferable or assignable.

(5) A license ((or small loan endorsement)) issued in accordance with this ((chapter)) subchapter remains in force and effect until surrendered, suspended, or revoked, or until the license expires as a result of nonpayment of the annual assessment fee.

Sec. 5.  RCW 31.45.050 and 2003 c 86 s 5 are each amended to read as follows:

(1) Each applicant and licensee shall pay to the director an investigation or examination fee as established in rule and an annual assessment fee for the coming year in an amount determined by rule as necessary to cover the operation of the program. The annual assessment fee is due upon the annual assessment fee due date as established in rule. Nonpayment of the annual assessment fee may result in expiration of the license as provided in subsection (2) of this section. In establishing the fees, the director shall differentiate between check cashing and check selling ((and making small loans,)) and consider at least the volume of business, level of risk, and potential harm to the public related to each activity. The fees collected shall be deposited to the credit of the financial services regulation fund in accordance with RCW 43.320.110.

(2) If a licensee does not pay its annual assessment fee by the annual assessment fee due date as specified in rule, the director or the director's designee shall send the licensee a notice of suspension and assess the licensee a late fee not to exceed twenty-five percent of the annual assessment fee as established in rule by the director. The licensee's payment of both the annual assessment fee and the late fee must arrive in the department's offices by 5:00 p.m. on the tenth day after the annual assessment fee due date, unless the department is not open for business on that date, in which case the licensee's payment of both the annual assessment fee and the late fee must arrive in the department's offices by 5:00 p.m. on the next occurring day that the department is open for business. If the payment of both the annual assessment fee and the late fee does not arrive prior to such time and date, then the expiration of the licensee's license is effective at 5:00 p.m. on the thirtieth day after the assessment fee due date. The director or the director's designee may reinstate the license if, within twenty days after the effective date of expiration, the licensee:

(a) Pays both the annual assessment fee and the late fee; and

(b) Attests under penalty of perjury that it did not engage in conduct requiring a license under this ((chapter)) subchapter during the period its license was expired, as confirmed by an investigation by the director or the director's designee.

(3) If a licensee intends to do business at a new location, to close an existing place of business, or to relocate an existing place of business, the licensee shall provide written notification of that intention to the director no less than thirty days before the proposed establishing, closing, or moving of a place of business.

Sec. 6.  RCW 31.45.060 and 2003 c 86 s 6 are each amended to read as follows:

(1) A schedule of the fees and the charges for the cashing and selling of checks, drafts, money orders, or other commercial paper serving the same purpose shall be conspicuously and continuously posted in every location licensed under this ((chapter)) subchapter. The licensee shall provide to its customer a receipt for each transaction. The receipt must include the name of the licensee, the type and amount of the transaction, and the fee or fees charged for the transaction.

(2) Each licensee shall keep and maintain such business books, accounts, and records as the director may require to fulfill the purposes of this ((chapter)) subchapter. Every licensee shall preserve such books, accounts, and records as required in rule by the director for at least two years from the completion of the transaction. Records may be maintained on an electronic, magnetic, optical, or other storage media. However, the licensee must maintain the necessary technology to permit access to the records by the department for the period required under this ((chapter)) subchapter.

(3) A check, draft, or money order sold by a licensee shall be drawn on an account of a licensee maintained in a federally insured financial institution authorized to do business in the state of Washington.

Sec. 7.  RCW 31.45.070 and 2012 c 17 s 9 are each amended to read as follows:

(1) No licensee may engage in a loan business; the negotiation of loans; or the discounting of notes, bills of exchange, checks, or other evidences of debt in the same premises where a check cashing or selling business is conducted, unless the licensee:

(a) Is conducting the activities of pawnbroker as defined in RCW 19.60.010;

(b) Is a properly licensed consumer loan company under chapter 31.04 RCW; or

(c) Is conducting other lending activity permitted in the state of Washington((; or

(d) Has a small loan endorsement issued under this chapter)).

(2) Except as otherwise permitted in this ((chapter)) subchapter, no licensee may at any time cash or advance any moneys on a postdated check or draft. However, a licensee may cash a check payable on the first banking day following the date of cashing if:

(a) The check is drawn by the United States, the state of Washington, or any political subdivision of the state, or by any department or agency of the state or its subdivisions; or

(b) The check is a payroll check drawn by an employer to the order of its employee in payment for services performed by the employee.

(3) Except as otherwise permitted in this ((chapter)) subchapter, no licensee may agree to hold a check or draft for later deposit. A licensee must deposit all checks and drafts cashed by the licensee as soon as practicable.

(4) No licensee may issue or cause to be issued any check, draft, or money order, or other commercial paper serving the same purpose, that is drawn upon the trust account of a licensee without concurrently receiving the full principal amount, in cash, or by check, draft, or money order from a third party believed to be valid.

(5) Each licensee shall comply with all applicable state and federal statutes relating to the activities governed by this ((chapter)) subchapter.

Sec. 8.  RCW 31.45.090 and 2005 c 274 s 257 are each amended to read as follows:

(1) Each licensee shall submit to the director, in a form approved by the director, a report containing financial statements covering the calendar year or, if the licensee has an established fiscal year, then for such fiscal year, within one hundred five days after the close of each calendar or fiscal year. The licensee shall also file such additional relevant information as the director may require. Any information provided by a licensee in an annual report that constitutes a trade secret under chapter 19.108 RCW is exempt from disclosure under chapter 42.56 RCW, unless aggregated with information supplied by other licensees in such a manner that the licensee's individual information is not identifiable. Any information provided by the licensee that allows identification of the licensee may only be used for purposes reasonably related to the regulation of licensees to ensure compliance with this ((chapter)) subchapter.

(2) A licensee whose license has been suspended or revoked shall submit to the director, at the licensee's expense, within one hundred five days after the effective date of such surrender or revocation, a closing audit report containing audited financial statements as of such effective date for the twelve months ending with such effective date.

(3) The director shall adopt rules specifying the form and content of such audit reports and may require additional reporting as is necessary for the director to ensure compliance with this ((chapter)) subchapter.

Sec. 9.  RCW 31.45.100 and 2003 c 86 s 16 are each amended to read as follows:

The director or the director's designee may at any time examine and investigate the business and examine the books, accounts, records, and files, or other information, wherever located, of any licensee or person who the director has reason to believe is engaging in the business governed by this ((chapter)) subchapter. For these purposes, the director or the director's designee may require the attendance of and examine under oath all persons whose testimony may be required about the business or the subject matter of the investigation. The director or the director's designee may require the production of original books, accounts, records, files, or other information, or may make copies of such original books, accounts, records, files, or other information. The director or the director's designee may issue a subpoena or subpoena duces tecum requiring attendance and testimony, or the production of the books, accounts, records, files, or other information. The director shall collect from the licensee the actual cost of the examination or investigation.

Sec. 10.  RCW 31.45.105 and 2012 c 17 s 10 are each amended to read as follows:

(1) It is a violation of this ((chapter)) subchapter for any person subject to this ((chapter)) subchapter to:

(a) 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;

(b) Directly or indirectly engage in any unfair or deceptive practice toward any person; and

(c) Directly or indirectly obtain property by fraud or misrepresentation((;

(e) Sell in a retail installment transaction under chapter 63.14 RCW open loop prepaid access (prepaid access as defined in 31 C.F.R. Part 1010.100(ww) and not closed loop prepaid access as defined in 31 C.F.R. Part 1010.100(kkk)))).

(2) It is a violation of this ((chapter)) subchapter for any person subject to this ((chapter)) subchapter to:

(a) Advertise, print, display, publish, distribute, or broadcast or cause or permit to be advertised, printed, displayed, published, distributed, or ((broadcast [broadcasted])) broadcasted any statement or representation that is false, misleading, or deceptive, or that omits material information;

(b) Fail to pay the annual assessment by the date and time as specified in RCW 31.45.050;

(c) Fail to pay any other fee, assessment, or moneys due the department.

(3) In addition to any other penalties, any transaction in violation of subsection (1) of this section is uncollectible and unenforceable.

Sec. 11.  RCW 31.45.110 and 2014 c 36 s 7 are each amended to read as follows:

(1) The director may issue and serve upon a licensee or applicant, or any director, officer, sole proprietor, partner, or controlling person of a licensee or applicant, a statement of charges if, in the opinion of the director, any licensee or applicant, or any director, officer, sole proprietor, partner, or controlling person of a licensee or applicant:

(a) Is engaging or has engaged in an unsafe or unsound financial practice in conducting a business governed by this ((chapter)) subchapter;

(b) Is violating or has violated this ((chapter)) subchapter, including violations of:

(i) Any rules, orders, or subpoenas issued by the director under any act;

(ii) Any condition imposed in writing by the director in connection with the granting of any application or other request by the licensee; or

(iii) Any written agreement made with the director;

(c) Is about to do the acts prohibited in (a) or (b) of this subsection when the opinion that the threat exists is based upon reasonable cause;

(d) Obtains a license by means of fraud, misrepresentation, concealment, or through mistake or inadvertence of the director;

(e) Provides false statements or omits material information on an application;

(f) Knowingly or negligently omits material information during or in response to an examination or in connection with an investigation by the director;

(g) Fails to pay a fee or assessment required by the director or any multistate licensing system prescribed by the director, or fails to maintain the required bond or deposit;

(h) Commits a crime against the laws of any jurisdiction involving moral turpitude, financial misconduct, or dishonest dealings. For the purposes of this section, a certified copy of the final holding of any court, tribunal, agency, or administrative body of competent jurisdiction is conclusive evidence in any hearing under this ((chapter)) subchapter;

(i) Knowingly commits or is a party to any material fraud, misrepresentation, concealment, conspiracy, collusion, trick, scheme, or device whereby any other person relying upon the word, representation, or conduct acts to his or her injury or damage;

(j) Converts any money or its equivalent to his or her own use or to the use of his or her principal or of any other person;

(k) Fails to disclose any information within his or her knowledge or fails to produce any document, book, or record in his or her possession for inspection by the director upon demand;

(l) Commits any act of fraudulent or dishonest dealing. For the purposes of this section, a certified copy of the final holding of any court, tribunal, agency, or administrative body of competent jurisdiction is conclusive evidence in any hearing under this ((chapter)) subchapter;

(m) Commits an act or engages in conduct that demonstrates incompetence or untrustworthiness, or is a source of injury and loss to the public;

(n) Violates any applicable state or federal law relating to the activities governed by this ((chapter)) subchapter.

(2) The statement of charges must be issued under chapter 34.05 RCW. The director or the director's designee may impose the following sanctions against any licensee or applicant, or any directors, officers, sole proprietors, partners, controlling persons, or employees of a licensee or applicant:

(a) Deny, revoke, suspend, or condition a license ((or small loan endorsement));

(b) Order the licensee or person to cease and desist from practices that violate this ((chapter)) subchapter or constitute unsafe and unsound financial practices;

(c) Impose a fine not to exceed one hundred dollars per day for each day's violation of this ((chapter)) subchapter;

(d) Order restitution or refunds to borrowers or other parties for violations of this ((chapter)) subchapter or take other affirmative action as necessary to comply with this ((chapter)) subchapter; and

(e) Remove from office or ban from participation in the affairs of any licensee any director, officer, sole proprietor, partner, controlling person, or employee of a licensee.

(3) The proceedings to impose the sanctions described in subsection (2) of this section, including any hearing or appeal of the statement of charges, are governed by chapter 34.05 RCW. The statute of limitations on actions not subject to RCW 4.16.160 that are brought under this ((chapter)) subchapter by the director is five years.

(4) Unless the licensee or person personally appears at the hearing or is represented by a duly authorized representative, the licensee is deemed to have consented to the statement of charges and the sanctions imposed in the statement of charges.

(5) Except to the extent prohibited by another statute, the director may engage in informal settlement of complaints or enforcement actions including, but not limited to, payment to the department for purposes of financial literacy and education programs authorized under RCW 43.320.150.

Sec. 12.  RCW 31.45.150 and 1994 c 92 s 287 are each amended to read as follows:

Whenever as a result of an examination or report it appears to the director that:

(1) The capital of any licensee is impaired;

(2) Any licensee is conducting its business in such an unsafe or unsound manner as to render its further operations hazardous to the public;

(3) Any licensee has suspended payment of its trust obligations;

(4) Any licensee has refused to submit its books, papers, and affairs to the inspection of the director or the director's examiner;

(5) Any officer of any licensee refuses to be examined under oath regarding the business of the licensee;

(6) Any licensee neglects or refuses to comply with any order of the director made pursuant to this ((chapter)) subchapter unless the enforcement of such order is restrained in a proceeding brought by such licensee;

the director may immediately take possession of the property and business of the licensee and retain possession until the licensee resumes business or its affairs are finally liquidated as provided in RCW 31.45.160. The licensee may resume business upon such terms as the director may prescribe.

Sec. 13.  RCW 31.45.180 and 1994 c 92 s 290 are each amended to read as follows:

Any person who violates or participates in the violation of any provision of the rules or orders of the director or of this ((chapter)) subchapter is guilty of a misdemeanor.

Sec. 14.  RCW 31.45.190 and 1991 c 355 s 19 are each amended to read as follows:

The legislature finds and declares that any violation of this ((chapter)) subchapter substantially affects the public interest and is an unfair and deceptive act or practice and an unfair method of competition in the conduct of trade or commerce as set forth in RCW 19.86.020. Remedies available under chapter 19.86 RCW shall not affect any other remedy the injured party may have.

Sec. 15.  RCW 31.45.200 and 1994 c 92 s 291 are each amended to read as follows:

The director has the power, and broad administrative discretion, to administer and interpret the provisions of this ((chapter)) subchapter to ensure the protection of the public.

(1) RCW 31.45.073 (Making small loans—Endorsement required—Due date—Termination date—Maximum amount—Installment plans—Interest—Fees—Postdated check or draft as security) and 2009 c 510 s 3, 2003 c 86 s 8, & 1995 c 18 s 2;

(2) RCW 31.45.077 (Small loan endorsement—Application—Form—Information—Exemption from disclosure—Fees) and 2005 c 274 s 256, 2003 c 86 s 9, 2001 c 177 s 13, & 1995 c 18 s 3;

(3) RCW 31.45.079 (Making small loans—Agent for a licensee or exempt entity—Federal preemption) and 2003 c 86 s 10;

(4) RCW 31.45.082 (Delinquent small loan—Restrictions on collection by licensee or third party—Definitions) and 2009 c 13 s 1 & 2003 c 86 s 11;

(5) RCW 31.45.084 (Small loan installment plan—Terms—Restrictions) and 2009 c 510 s 4 & 2003 c 86 s 12;

(6) RCW 31.45.085 (Loan application—Required statement—Rules) and 2009 c 510 s 5;

(7) RCW 31.45.086 (Small loans—Right of rescission) and 2003 c 86 s 13;

(8) RCW 31.45.088 (Small loans—Disclosure requirements—Advertising—Making loan) and 2003 c 86 s 14;

(9) RCW 31.45.093 (Information system—Access—Required information—Fees—Rules) and 2009 c 510 s 6;

(10) RCW 31.45.095 (Report by director—Contents) and 2009 c 510 s 7; and

(11) RCW 31.45.210 (Military borrowers—Licensee's duty—Definition) and 2005 c 256 s 1.

NEW SECTION.  Sec. 17.  A new section is added to chapter 31.45 RCW under the subchapter heading "check cashers and sellers" to read as follows:

(1) Small loans made pursuant to this chapter as it existed before the effective date of this section may no longer be made on and after July 1, 2016, or on and after the effective date of the final rules adopted by the director implementing this act, whichever is later, provided the subchapter "small consumer installment loans" becomes law as it is enacted by the legislature.

(2) Provided subsection (1) of this section becomes law as enacted by the legislature and the director adopts final rules implementing this act, all small loan licensees must surrender their small loan license in accordance with the closure rules adopted by the director and pay any applicable assessments due. Notwithstanding surrender or such closure rules, a small loan licensee may collect a small loan with an outstanding balance. The director has the authority to transition the database for small loans as necessary. The director may adopt rules to implement this section.

(3) This section is only effective provided section 16 of this act becomes law as enacted by the legislature.

(4) The director must provide notice of the effective date of the final rules adopted under this section to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the director.

SMALL CONSUMER INSTALLMENT LOANS

(1) "Authenticate" means the same as defined in RCW 62A.9A-102.

(2) "Borrower" means a natural person who receives a small consumer installment loan.

(3) "Controlling person" means a person owning or controlling ten percent or more of the total outstanding shares of the applicant or licensee, if the applicant or licensee is a corporation, and a member who owns ten percent or more of a limited liability company or limited liability partnership.

(4) "Department" means the department of financial institutions.

(5) "Director" means the director of financial institutions.

(6) "Final payment date" means the date of the borrower's last scheduled payment on a small consumer installment loan.

(7) "Gross monthly income" means a borrower's or potential borrower's gross monthly income as demonstrated by evidence of income, including, but not limited to, a pay stub, documentation reflecting receipt of public benefits, tax returns, bank statements, or other documentation.

(8) "License" means a license issued by the director under this subchapter.

(9) "Licensee" means a single small consumer installment lender licensed by the director to engage in business in accordance with this subchapter. "Licensee" also means a small consumer installment lender, whether located within or outside of this state, who fails to obtain a license required by this subchapter.

(10) "Loaned amount" means the principal amount of the loan exclusive of any interest, fees, penalties, or charges authorized by this subchapter.

(11) "Military borrower" means:

(a) A "covered borrower" as defined in 32 C.F.R. Sec. 323.3; and

(b)(i) A member of the reserve components of the United States army, navy, air force, marine corps, coast guard, army national guard, or air national guard; and

(ii) A spouse or dependent child of a person under (b)(i) of this subsection.

(12) "Person" means an individual, partnership, association, limited liability company, limited liability partnership, trust, corporation, and any other legal entity.

(13) "Record" means the same as defined in RCW 62A.1-201.

(14) "Scheduled payment" means any single payment disclosed in a payment schedule on a federal truth in lending act disclosure. "Scheduled payment" does not mean an actual payment on a date different than a payment on the loan payment schedule, or the payment in full of a loan before the final payment date on the loan payment schedule.

(15) "Small consumer installment loan" means a loan for personal, family, or household purposes made to a natural person in a single advance with terms as provided for in this subchapter.

(16) "Truth in lending act" means the truth in lending act, 15 U.S.C. Sec. 1601 and Regulation Z, 12 C.F.R. Part 1026.

(2) This subchapter 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; or

(b) Loans made under chapters 19.60 and 31.04 RCW.

(a) The legal name, residence, and business address of the applicant and, if the applicant is a partnership, association, limited liability company, limited liability partnership, or corporation, of every member, officer, principal, or director thereof;

(b) The location where the initial registered office of the applicant will be located;

(c) The complete address of any other locations at which the applicant currently proposes to engage in making small consumer installment loans; and

(d) Such other data, financial statements, and pertinent information as the director may require with respect to the applicant, its members, principals, or officers.

(2) As part of or in connection with an application for any license under this section, or periodically, each officer, director, and owner applicant shall furnish information concerning his or her identity, including fingerprints for submission to the Washington state patrol or the federal bureau of investigation for a state and national criminal history background check, personal history, experience, business record, purposes, and other pertinent facts, as the director may reasonably require. As part of or in connection with an application for a license under this subchapter, or periodically upon license renewal, the director is authorized to receive criminal history record information that includes nonconviction data as defined in RCW 10.97.030. The director may only disseminate nonconviction data obtained under this section to criminal justice agencies. This section does not apply to financial institutions regulated under chapters 31.12 and 31.13 RCW and Titles 30A, 32, and 33 RCW.

(3) Any information in the application regarding the personal residential address or telephone number of the applicant, any financial information about the applicant and entities owned or controlled by the applicant, and any trade secret as defined in RCW 19.108.010 including any financial statement that is a trade secret, is exempt from the public records disclosure requirements of chapter 42.56 RCW.

(4) The application must be filed together with an application fee established by rule by the director. The fees collected must be deposited to the credit of the financial services regulation fund in accordance with RCW 43.320.110.

(5) Each applicant shall file and maintain a surety bond, approved by the director, executed by the applicant as obligor and by a surety company authorized to do a surety business in this state as surety, whose liability as a surety does not exceed, in the aggregate, the penal sum of the bond. The penal sum of the bond must be a minimum of thirty thousand dollars and a maximum of two hundred fifty thousand dollars based on the annual dollar amount of loans originated. The bond must run to the state of Washington as obligee for the use and benefit of the state and of any person or persons who may have a cause of action against the obligor under this subchapter. The bond must be conditioned that the obligor as licensee will faithfully conform to and abide by this subchapter and all the rules adopted under this subchapter. The bond must pay to the state and any person or persons having a cause of action against the obligor all moneys that may become due and owing to the state and those persons under and by virtue of this subchapter.

(a) The applicant has satisfied the licensing requirements of this subchapter;

(b) The applicant is financially responsible and appears to be able to conduct the business of making small consumer installment loans in an honest, fair, and efficient manner with the confidence and trust of the community and in accordance with this subchapter; and

(c) The applicant has the required bond.

(2) The director may refuse to issue a license if he or she finds that the applicant, or any person who is a director, officer, partner, agent, sole proprietor, owner, or controlling person of the applicant, has been convicted of a felony in any jurisdiction within seven years of filing the present application or is associating or consorting with any person who has been convicted of a felony in any jurisdiction within seven years of filing the present application.

(3) A license may not be issued to an applicant:

(a) Whose license to conduct business under this subchapter, or any similar statute in any other jurisdiction, has been suspended or revoked within five years of the filing of the present application;

(b) Who has been banned from the industry by an administrative order issued by the director or the director's designee, for the period specified in the administrative order; or

(c) Who has advertised or made internet loans in violation of this subchapter.

(4) A license issued in accordance with this subchapter remains in force and effect until surrendered, suspended, or revoked, or until the license expires as a result of nonpayment of the annual assessment fee as defined in this subchapter.

(1) The interest charged on the loaned amount must not exceed thirty-six percent per annum, exclusive of fees, penalties, or charges authorized by this subchapter;

(2) The loaned amount must not exceed one thousand dollars;

(3) The loaned amount and accrued interest and fees must be fully repayable in substantially equal and consecutive installments according to a payment schedule agreed to by the parties;

(4) A loan term must not be less than one hundred eighty days;

(5) A loan term must not be more than three hundred sixty-six days;

(6) The loaned amount and accrued interest and fees must be fully amortized over the term of the loan; and

(7) The borrower's repayment obligations must not be secured by a lien on any real or personal property.

(1) May charge, contract for, and receive interest of no more than thirty-six percent per annum on the outstanding unpaid balance of the loaned amount, exclusive of fees, penalties, or charges authorized by this subchapter;

(2) May charge a loan origination fee on a small consumer installment loan not to exceed fifteen percent of the loaned amount. The origination fee shall not be precomputed, but shall accrue each day until the loan is repaid in full. The amount that accrues each day shall be equal to the total amount of the origination fee divided by the number of days in the loan term. Notwithstanding this subsection, a small consumer installment loan licensee must provide a full refund of all charges after rescission as provided in section 30 of this act;

(3) May charge a monthly maintenance fee on a small consumer installment loan, not to exceed seven and one-half percent of the loaned amount for each month in which the loan has an outstanding balance. A monthly maintenance fee is fully earned at the end of each month after the loan origination date when the borrower has a balance outstanding on the last day of the month and is not subject to refund. Notwithstanding this subsection, maintenance fees for a small consumer installment loan shall not exceed an amount equal to sixty dollars for each month the loan remains unpaid. For the purpose of this subsection, a "month" is measured from a given date of a given calendar month to the same date of the subsequent calendar month. If the origination date of the small consumer installment loan is the last day of a month, months are measured from the last day of that month to the last day of each following month. If the origination date of the small consumer installment loan is the 29th or 30th of a month, the last day of February must be used when applicable;

(4) May contract with the borrower to repay the small consumer installment loan in installments that are substantially equal in amount which may be repayable weekly, biweekly, semimonthly, monthly, or in such other repayment frequency as the licensee and borrower may agree;

(5) May include in the amount of each scheduled payment all or part of the following, as applicable: (a) The accrued, pro rata portion of the origination fee; (b) a portion of the monthly maintenance fee equal to the aggregate of all monthly maintenance fees permitted under subsection (3) of this section divided by the total number of scheduled installment payments; (c) accrued interest; and (d) principal;

(6) Is prohibited from making a small consumer installment loan to a borrower if the loaned amount exceeds thirty percent of the borrower's gross monthly income. Gross monthly income must be evidenced by a pay stub or other evidence of income at least once every one hundred eighty days, and such evidence must (a) be no more than forty-five days old when presented to the licensee and (b) have been presented to the licensee no more than one hundred eighty days before the date on which the small consumer installment loan is made;

(7) May, in the event that any scheduled payment is delinquent ten days or more:

(a) Charge and collect a penalty of not more than twenty-five dollars per loan; or

(b) Declare the entire loan due and payable and proceed to collect the small consumer installment loan, including the unpaid balance of the loaned amount and all interest, loan origination, and monthly maintenance fees that would have been due if the loan had been paid in full on the final payment date;

(8) May collect from the borrower reasonable attorneys' fees, actual expenses, and costs incurred in connection with the collection of any amounts due to a licensee with respect to a small consumer installment loan;

(9) Is prohibited from charging a prepayment fee. A borrower is allowed to pay all or part of a small consumer installment loan before the maturity date without incurring any additional fee;

(10) Is prohibited from requiring a borrower to purchase add-on products such as credit insurance; and

(11) Is prohibited from charging any other interest, fees, penalties, or charges, except those provided in this section.

(1) The name and address of the borrower and the licensee;

(2) The transaction date;

(3) The loaned amount;

(4) A statement of the total amount of finance charges charged, expressed both as a dollar amount and an annual percentage rate, calculated in accordance with the truth in lending act;

(5) The installment payment schedule;

(6) The right to rescind the loan on or before the close of business on the next day of business at the location where the loan was originated;

(7) A notice to the borrower that delinquency on one scheduled payment may result in a penalty of not more than twenty-five dollars per loan and/or acceleration of the loan;

(8) A description of the methods by which loan payments may be made, which may include cash, check, electronic fund transfers through automated clearing house or debit network, or any additional method of loan payment authorized by the director after rule making. However, (a) a licensee may not condition an extension of credit under a small consumer installment loan on the borrower's repayment by preauthorized electronic fund transfers, and (b) a postdated check or electronic payment authorization used to make a payment on a small consumer installment loan must not be considered security or collateral for the loan; and

(9) A notice to the borrower in at least ten-point type that states:

A SMALL CONSUMER INSTALLMENT LOAN IS NOT INTENDED TO MEET LONG-TERM FINANCIAL NEEDS.

A SMALL CONSUMER INSTALLMENT LOAN SHOULD BE USED ONLY TO MEET SHORT-TERM CASH NEEDS.

WHILE YOU ARE NOT REQUIRED TO REPAY THIS LOAN BEFORE ITS DUE DATE, IT IS IN YOUR BEST INTEREST TO DO SO. THE SOONER YOU REPAY THE LOAN, THE LESS IN INTEREST, FEES, AND OTHER CHARGES YOU WILL PAY.

(2) The licensee shall provide to the borrower a receipt for each small consumer loan transaction. The receipt must include the name of the licensee, the type and amount of the transaction, and the fees and charges charged for the transaction.

(2) Unless invited by the borrower, a licensee may not visit a borrower's residence or place of employment for the purpose of collecting a delinquent small consumer installment loan. A licensee may not impersonate a law enforcement official, or make any statements which might be construed as indicating an official connection with any federal, state, county, or city law enforcement agency, or any other governmental agency, while engaged in collecting a small consumer installment loan.

(3) A licensee may not communicate with a borrower in such a manner as to harass, intimidate, abuse, or embarrass a borrower, including but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of force or violence, or by use of offensive language. A communication is presumed to have been made for the purposes of harassment if it is initiated by the licensee for the purposes of collection and:

(a) It is made with a borrower, spouse, or domestic partner in any form, manner, or place, more than three times in a single week;

(b) It is made with a borrower at his or her place of employment more than one time in a single week or made to a borrower after the licensee has been informed that the borrower's employer prohibits these communications;

(c) It is made with the borrower, spouse, or domestic partner at his or her place of residence between the hours of 9:00 p.m. and 7:30 a.m.; or

(d) It is made to a party other than the borrower, the borrower's attorney, the licensee's attorney, or a consumer reporting agency if otherwise permitted by law except for purposes of acquiring location or contact information about the borrower.

(4) A licensee is required to maintain a communication log of all telephone and written communications with a borrower initiated by the licensee regarding any collection efforts including date, time, and the nature of each communication.

(5) If a dishonored check is assigned to any third party for collection, this section applies to the third party for the collection of the dishonored check.

(6) For the purposes of this section, "communication" includes any contact with a borrower, initiated by the licensee, in person, by telephone, or in writing (including emails, text messages, and other electronic writing) regarding the collection of a delinquent small consumer installment loan, but does not include any of the following:

(a) Communication while a borrower is physically present in the licensee's place of business;

(b) An unanswered telephone call in which no message (other than a caller identification) is left, unless the telephone call violates subsection (3)(c) of this section; and

(c) An initial letter to the borrower that includes disclosures intended to comply with the applicable provisions of the federal fair debt collection practices act.

(7) For the purposes of this section:

(a) A communication occurs at the time it is initiated by a licensee regardless of the time it is received or accessed by the borrower; and

(b) A call to a number that the licensee reasonably believes is the borrower's cell phone will not constitute a communication with a borrower at the borrower's place of employment.

(8) For the purposes of this section, "week" means a series of seven consecutive days beginning on a Sunday.

(2) A licensee is prohibited from extending a small consumer installment loan to a borrower who:

(a) Is in default on another small consumer installment loan until after that loan is paid in full or two years have passed from the origination date of the small consumer installment loan, whichever occurs first; or

(b) Is in a repayment plan for a small consumer installment loan with another licensee.

(3) A licensee is prohibited from extending a small consumer installment loan at any time to a borrower who:

(a) Has an unpaid small loan made by a licensee under chapter 31.45 RCW; or

(b) Is in an installment plan under RCW 31.45.088.

(4) The director has broad rule-making authority to adopt and implement a database system to carry out this section. This includes, but is not limited to, taking the steps necessary to contract a database vendor, and set licensee fees to operate and administer the database system.

(5) The information in the database described in this section is exempt from public disclosure under chapter 42.56 RCW.

(2) The director must adopt rules to implement this section.

(a) Is required to make the repayment plan offer available to the borrower for a period of at least fifteen days after the date of the offer; and

(b) Is not required to make such an offer more than once for each loan.

(2) The repayment plan offer must:

(a) Be in writing and sent by electronic mail to an electronic mail address provided by the borrower to the licensee, or by United States mail, return receipt requested, to the borrower's mailing address provided by the borrower to the licensee;

(b) State the date by which the borrower must act to enter into a repayment plan;

(c) Briefly explain the procedures the borrower must follow to enter into a repayment plan;

(d) If the licensee requires the borrower to make an initial payment to enter into a repayment plan, briefly explain the requirement and state the amount of the initial payment and the date the initial payment must be made;

(e) State that the borrower has the opportunity to enter into a repayment plan with a term of at least ninety days after the date the repayment plan is entered into; and

(f) Include the following amounts:

(i) The initial payment due; and

(ii) The total amount due if the borrower enters into a repayment plan.

(3) Under the terms of any repayment plan pursuant to this section:

(a) The borrower must enter into the repayment plan not later than fifteen days after the date of the repayment plan offer, unless the licensee allows a longer period;

(b) The licensee must allow the period for repayment to extend at least ninety days after the date of the repayment plan, unless the borrower agrees to a shorter term; and

(c) The licensee may require the borrower to make an initial payment of not more than twenty percent of the total amount due under the terms of the repayment plan.

(4) If the licensee and borrower enter into a repayment plan pursuant to this section, the licensee shall honor the terms of the repayment plan, and the licensee shall not:

(a) Except as otherwise provided by this subchapter, charge any other amount to a borrower, including, without limitation, any amount or charge payable directly or indirectly by the borrower and imposed directly or indirectly by the licensee as an incident to or as a condition of entering into a repayment plan, other than the fees charged pursuant to the original loan agreement;

(b) Accept any collateral from the borrower to enter into the repayment plan;

(c) Sell to the borrower any insurance or require the borrower to purchase insurance or any other goods or services to enter into the repayment plan; and

(d) Attempt to collect an amount that is greater than the amount owed under the terms of the repayment plan.

(5) If the licensee and borrower enter into a repayment plan pursuant to this section, the licensee shall:

(a) Prepare a written agreement establishing the repayment plan; and

(b) Give the borrower a copy of the written repayment agreement. The written repayment agreement must:

(i) Be signed by the licensee and borrower; and

(ii) Contain all of the terms of the repayment plan, including, without limitation, the total amount due under the terms of the repayment plan.

(6) If the borrower defaults on the repayment plan, the licensee may, without any further notice to the borrower, commence any civil action and/or pursue any remedy as otherwise authorized by law.

(a) Fail to make disclosures to loan applicants as required by any applicable state or federal law;

(b) 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;

(c) Directly or indirectly engage in any unfair or deceptive practice toward any person;

(d) Directly or indirectly obtain property by fraud or misrepresentation;

(e) Make a small consumer installment loan to any person physically located in Washington through the use of the internet, facsimile, telephone, kiosk, or other means without first obtaining a license;

(f) 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 small consumer installment loan or engage in bait and switch advertising;

(g) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any reports filed with the department of financial institutions by a licensee or in connection with any investigation conducted by the department of financial institutions;

(h) 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, or any other applicable state or federal statutes or regulations;

(i) Make small consumer installment loans from any unlicensed location;

(j) Fail to comply with all applicable state and federal statutes relating to the activities governed by this subchapter; or

(k) Fail to pay any other fee, assessment, or moneys due the department.

(2) In addition to any other penalties, any transaction in violation of subsection (1) of this section is uncollectible and unenforceable.

(2) Licensees are prohibited from advertising or making small consumer installment loans via the internet without first having obtained a license.

(2) If a licensee does not pay its annual assessment fee by the annual assessment fee due date as specified in rule, the director or the director's designee shall send the licensee a notice of expiration and assess the licensee a late fee not to exceed fifteen percent of the annual assessment fee as established in rule by the director. The licensee's payment of both the annual assessment fee and the late fee must arrive in the department of financial institutions' offices by 5:00 p.m. on the tenth day after the annual assessment fee due date, unless the department of financial institutions is not open for business on that date, in which case the licensee's payment of both the annual assessment fee and the late fee must arrive in the department of financial institutions' offices by 5:00 p.m. on the next occurring day that the department of financial institutions is open for business. If the payment of both the annual assessment fee and the late fee does not arrive prior to such time and date, then the expiration of the licensee's license is effective at 5:00 p.m. on the thirtieth day after the assessment fee due date. The director or the director's designee may reinstate the license if, within fifteen days after the effective date of expiration, the licensee pays the annual assessment fee and the late fee.

(3) If a licensee intends to do business at a new location, to close an existing place of business, or to relocate an existing place of business, the licensee shall provide written notification of that intention to the director no less than thirty days before the proposed establishing, closing, or moving of a place of business.

(a) State that an order is sought under this section;

(b) Adequately specify the documents, records, evidence, or testimony; and

(c) Include a declaration made under oath that an investigation is being conducted for a lawfully authorized purpose related to an investigation within the director's authority and that the subpoenaed documents, records, evidence, or testimony are reasonably related to an investigation within the director's authority.

(2) When an application under this section is made to the satisfaction of the court, the court must issue an order approving the subpoena. An order under this subsection constitutes authority of law for the director to subpoena the documents, records, evidence, or testimony.

(3) The director or authorized assistants may seek approval and a court may issue an order under this section without prior notice to any person, including the person to whom the subpoena is directed and the person who is the subject of an investigation. An application for court approval is subject to the fee and process set forth in RCW 36.18.012(3).

(2) The director shall adopt rules specifying the form and content of annual reports and may require additional reporting as is necessary for the director to ensure compliance with this subchapter.

(3) A licensee whose license has been suspended or revoked shall submit to the director, at the licensee's expense, within one hundred five days after the effective date of the suspension or revocation, a closing audit report containing audited financial statements as of the effective date for the twelve months ending with the effective date.

(4) The director is authorized to enter into agreements or sharing arrangements regarding licensee reports, examination, or investigation information with other governmental agencies, the conference of state bank supervisors, the American association of residential mortgage regulators, the national association of consumer credit administrators, or other associations representing governmental agencies as established by rule, regulation, or order of the director.

(a) Is engaging or has engaged in an unsafe or unsound financial practice in conducting a business governed by this subchapter;

(b) Is violating or has violated this subchapter, including violations of:

(i) Any rules, orders, or subpoenas issued by the director under any act;

(ii) Any condition imposed in writing by the director in connection with the granting of any application or other request by the licensee; or

(iii) Any written agreement made with the director;

(c) Obtains a license by means of fraud, misrepresentation, or concealment;

(d) Provides false statements or omits material information on an application;

(e) Knowingly or negligently omits material information during or in response to an examination or in connection with an investigation by the director;

(f) Fails to pay a fee or assessment required by the director or any multistate licensing system prescribed by the director, or fails to maintain the required bond;

(g) Commits a crime against the laws of any jurisdiction involving moral turpitude, financial misconduct, or dishonest dealings. For the purposes of this section, a certified copy of the final holding of any court, tribunal, agency, or administrative body of competent jurisdiction is conclusive evidence in any hearing under this subchapter;

(h) Knowingly commits or is a party to any material fraud, misrepresentation, concealment, conspiracy, collusion, trick, scheme, or device whereby any other person relying upon the word, representation, or conduct acts to his or her injury or damage;

(i) Wrongly converts any money or its equivalent of any other person to his or her own use or to the use of his or her principal;

(j) Fails to disclose to the director any material information within his or her knowledge or fails to produce any document, book, or record in his or her possession for inspection by the director upon lawful demand;

(k) Commits any act of fraudulent or dishonest dealing. For the purposes of this section, a certified copy of the final holding of any court, tribunal, agency, or administrative body of competent jurisdiction is conclusive evidence in any hearing under this subchapter;

(l) Commits an act or engages in conduct that demonstrates incompetence or untrustworthiness, or is a source of injury and loss to the public; or

(m) Violates any applicable state or federal law relating to the activities governed by this subchapter.

(2) The director may issue and serve upon a licensee or applicant, or any director, officer, sole proprietor, partner, or controlling person of the licensee or applicant, a statement of charges if the director has reasonable cause to believe that the licensee or applicant is about to do acts prohibited in subsection (1) of this section.

(3) The statement of charges must be issued under chapter 34.05 RCW. The director or the director's designee may impose the following sanctions against any licensee or applicant, or any directors, officers, sole proprietors, partners, controlling persons, or employees of a licensee or applicant:

(a) Deny, revoke, suspend, or condition a license;

(b) Order the licensee or person to cease and desist from practices that violate this subchapter;

(c) Impose a fine not to exceed one hundred dollars per day per violation of this subchapter;

(d) Order restitution or refunds, or both, to borrowers or other affected parties for violations of this subchapter or to take other affirmative action as necessary to comply with this subchapter; and

(e) Remove from office or ban from participation in the affairs of any licensee any director, officer, sole proprietor, partner, controlling person, or employee of a licensee.

(4) The proceedings to impose the sanctions described in subsection (3) of this section, including any hearing or appeal of the statement of charges, are governed by chapter 34.05 RCW.

(5) Unless the licensee or person personally appears at the hearing or is represented by a duly authorized representative, the licensee is deemed to have consented to the statement of charges and the sanctions imposed in the statement of charges.

(6) Except to the extent prohibited by another statute, the director may engage in informal settlement of complaints or enforcement actions including, but not limited to, payment to the department of financial institutions for purposes of financial literacy and education programs authorized under RCW 43.320.150.

(1) The number of branches and total locations;

(2) The number of loans made during 2016;

(3) Loan volume;

(4) Average loan amount;

(5) Total fees charged, in total and by category of fee or other charge;

(6) Average payment per month, in total and by category of fee or other charge;

(7) Average income of borrower;

(8) The number of military borrowers;

(9) Borrower frequency;

(10) The number of unique borrowers;

(11) Average length of loan repayment;

(12) The number of borrowers taking out the maximum loan amount;

(13) The number of borrowers who went into default;

(14) Average length of time a borrower has a loan before a borrower goes into default;

(15) Any legislative recommendations by the director; and

(16) Any other information that the director believes is relevant or useful.

(2) The director or the director's designee shall take the actions necessary to ensure sections 19 through 54 of this act are implemented on July 1, 2016.

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