The Consumer Loan Act. The Consumer Loan Act (CLA) regulates consumer loans in Washington by providing various requirements for lenders and protections for borrowers. The CLA authorizes the Department of Financial Institutions to regulate consumer loan companies doing business in Washington. The CLA is applicable to each loan made to a resident of Washington by a licensee.
The Definition of a Loan. Under the CLA, the term loan is currently defined as a sum of money lent at interest or for a fee or other charges and includes both open-end and closed-end loan transactions.
Applicability of the Consumer Loan Act. The CLA is applicable to each loan made to a resident of Washington by a licensee and subject to its authority and restrictions. There are a number of entities exempt from the CLA, some of which include:
Violations of the Consumer Loan Act. The CLA has a number of violations listed in statute. Some of which include:
Engaging in any device, subterfuge, or pretense to evade the requirements of the CLA in order to circumvent CLA requirements is not explicitly referenced as a violation of the CLA.
Expands the Definition of Loans. The term loan is expanded to include money or credit to a borrower in exchange for a borrower to agree to a set of terms including, but not limited to:
The term continues to include open-end and closed-end credit. The term also includes any transaction conducted via any medium. Any transaction under the term loan is subject to the CLA.
Anti-Evasion Provisions in the Consumer Loan Act. Individuals attempting to evade the requirements of the CLA through any device, subterfuge, or pretense to make, offer, or assist a borrower obtain a loan with a greater rate of interest, consideration, or charge is in violation of the CLA.