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 now 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, the bill stipulates that the maximum loan term cannot exceed 45 days unless both the borrower and licensee agree to an extension without additional fees or interest. The Department of Financial Institutions is tasked with biennially determining the inflation-adjusted maximum principal amount starting January 1, 2027.

Furthermore, the bill includes provisions that limit borrowers to a maximum of eight small loans from all licensees within a 12-month period and prohibits licensees from lending to borrowers who are in default on another small loan until that loan is fully paid or two years have passed. The interest and fees charged by licensees are also regulated, with specific percentages outlined for different loan amounts. The bill aims to enhance consumer protection while providing clarity on the lending process for small loans.

Statutes affected:
Original bill: 31.45.073
Substitute bill: 31.45.073