The bill amends RCW 31.45.073 to update regulations surrounding small loans in Washington State. It establishes that the maximum principal amount for small loans is set at $1,200, adjusted for inflation based on the consumer price index, or 30 percent of the borrower's gross monthly income, whichever is lower. Additionally, it specifies that the termination date of a small loan cannot exceed 45 days from the origination date unless both the borrower and licensee agree to extend the term without additional fees or interest. The bill also introduces a requirement for the Department of Financial Institutions to calculate and publish the inflation-adjusted maximum principal amount annually starting January 1, 2027.

Furthermore, the bill maintains restrictions on borrowers, prohibiting them from receiving more than eight small loans from all licensees within a 12-month period. It also outlines the interest and fee structure for licensees, allowing them to charge a maximum of 15 percent on the first $500 of principal and 10 percent on any amount exceeding that. The bill emphasizes that licensees cannot make loans to borrowers in default on other small loans until those loans are fully paid or two years have passed. Overall, the amendments aim to enhance consumer protection while providing clarity on the lending process for small loans.

Statutes affected:
Original bill: 31.45.073