Consumer Loan Companies
Consumer loan companies doing business in Washington State must be licensed with DFI's Division of Consumer Services.
Quick Links for Consumer Loan Companies
What's New
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Consumer Loan Act Amendments Adopted - Amendments Effective
January 23, 2009
On December 23, 2008, DFI filed the CR-103 (PDF)* and adopted amendments (PDF)*. The rules become effective January 23, 2009. Learn more about the rulemaking. -
Changes To The Loan Originator Test
In order to begin preparing for the implementation of the federal SAFE act (H.R. 3221, or “HERA,” Public Law No. 110-289), DFI has removed the loan originator test study guide from the website. Loan originator applicants must study for the test based on the continuing education topics as described in WAC 208-660-600(23) (under the Mortgage Broker Practices Act). Eventually, the Nationwide Mortgage Licensing System (NMLS) will create and administer the test based on the standards in the SAFE act.
Taking this step will help ensure that any federal review of the test, and thereby the quality of education of newly licensed loan originators, meets the SAFE requirements. - Reverse Mortgages
License holders under both the Consumer Loan Act (CLA) and Mortgage Broker Practices Act (MBPA) can broker reverse mortgages to entities exempt from the CLA (nationally chartered entities). The lending entity must be exempt from the CLA due to RCW 31.04.125, a provision in the CLA that prohibits the compounding of interest on loans secured by real estate. Examples of exempt entities are Washington chartered banks, credit unions, their affiliates or subsidiaries and nationally chartered banks, credit unions, or their affiliates or subsidiaries
Contact Cindy Fazio, 360-902-8800 if you have questions. - June 12 Licensing Deadline
Senate Bill 6471 (chapter 78, Laws of 2008), passed by the legislature, and signed by the Governor on March 19, 2008, requires that all lenders doing business in Washington be licensed by the Department of Financial Institutions under the Consumer Loan Act (CLA), chapter 31.04 RCW. The law becomes effective June 12, 2008 which means that companies must be licensed by that date.
To obtain a consumer loan license, companies must submit their materials through the Nationwide Mortgage Licensing System (NMLS). Some of you may have already joined the NMLS because you are licensed as a mortgage broker in a state that joined the NMLS in January of this year. The NMLS also facilitates the licensure of lenders and the Washington lender licensing section is available to you for licensing. - SHB 2770 Rulemaking - "Disclosure Summary"
Disclosure summary rules draft and draft model disclosure summary are now available online for review. Learn more. - FAQs Prior to Rulemaking on SB 6471
In order to assist individuals and entities affected by SB 6471 DFI has made pre-rulemaking interpretations. View FAQs. - DFI Is Now Managing Consumer Loan Company Licenses Through The NMLS
Effective May 1, 2008, all new applications and amendments for Consumer Loan Licenses must be completed through the Nationwide Mortgage Licensing System (NMLS). Learn more.
Consumer Loan Act Legislative Update
Two pieces of legislation passed during the recent session amend the Consumer Loan Act, chapter 31.04 RCW.
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SHB 2770 (PDF)* – the Governor’s Omnibus legislation implementing the recommendations of the Homeownership Task Force. This legislation impacts Banks, Credit Unions, the Consumer Loan Act (CLA), and the MBPA. The bill addresses prepayment penalties, negative amortization loans, the federal guidance on nontraditional mortgage products and subprime lending, and makes mortgage fraud a class B felony.
- SB 6471 (PDF)* – This legislation amends the CLA and MBPA. All lenders, except those making loans under chapter 63.14 RCW, must have a license under the Consumer Loan Act. Lending is no longer allowed under the MBPA.
Laws & Rules
- Consumer Loan Law (RCW 31.04)
- Consumer Loan Rules (WAC 208-620)
- Usury Law (RCW 19.52)
Resources
- Consumer Loan Act Interpretative & Policy Statements
- Consumer Loan Interpretive Letters 1992-2003
- Letter from DFI Regarding Borrowers Facing Foreclosure (PDF)*
- CSBS/AARMR/NACCA Statement on Subprime Mortgage Lending
- CSBS/AARMR Guidance on Nontraditional Mortgage Product Risks
- Guide to Washington State Interest Rates
- DFI's Free Guide to Home Loans for Consumers
Keeping Data Secure
To protect non-public sensitive information from unauthorized access, the Department of Financial Institutions (DFI) does not send, receive, or request the transmission of unencrypted electronic non-public sensitive information. Learn more...
Contact Us
If you have any questions about consumer loan companies or obtaining a consumer loan license, feel free to contact us by phone at 360-902-8703 or toll free at 1-877 RING DFI (746-4334). You may also email us at dcs@dfi.wa.gov.
* This document is a PDF file, and you will need Adobe Acrobat Reader to view it. If you don't already have Acrobat Reader installed on your computer, you may download it for free from Adobe.
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