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ARTICLE · 26 JULY 2024

Significant "True Lender" Changes To Washington Consumer Loan Act Now Effective

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Washington recently enacted significant changes to its Consumer Loan Act that may bring certain nonbank loan marketers and program managers within its scope. The Consumer Loan Act requires a license to make...

United StatesFinance and Banking
Krista Cooley
Krista Cooley
Francis Doorley
Francis Doorley
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Washington recently enacted significant changes to its Consumer Loan Act that may bring certain nonbank loan marketers and program managers within its scope. The Consumer Loan Act requires a license to make consumer loans of any dollar amount that bear a finance charge, including both mortgage and non-mortgage loans. In addition to requiring non-exempt lenders to obtain a license in order to make consumer loans, the Consumer Loan Act also imposes a maximum finance charge limit of 25% APR on these consumer loans. However, prior to June 6, 2024, the Consumer Loan Act did not require a license to solicit, broker, arrange, or purchase non-mortgage consumer loans.

Senate Bill 6025, titled the "Predatory Loan Prevention Act," was signed by Governor Jay Inslee and took effect on June 6, 2024. Senate Bill 6025 amends the Consumer Loan Act to incorporate "true lender" provisions that, as a matter of law, re-characterize certain non-exempt entities as the lender of consumer

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