Wednesday, April 18, 2007
FOR IMMEDIATE RELEASE:
Deb Bortner, Director of Consumer Services
PH 360.902.8786 email@example.com
Law Requiring Licensing of Internet Payday Lenders Signed by Governor Gregoire
OLYMPIA – Scott Jarvis, Director of the Department of Financial Institutions (DFI), joined Governor Chris Gregoire today as she signed into law DFI’s requested amendments to payday lending law. Included among a number of new enforcement provisions is the requirement that online payday lenders be licensed before doing business in Washington.
Senator Jean Berkey (D-Everett) sponsored Senate Bill 5199 and was instrumental in keeping the new consumer protections alive and moving forward. The bill amends the current Check Casher and Sellers Act (RCW 31.45) and expands DFI’s payday lending enforcement authority. Going forward, anyone who offers a small loan to a person physically located in Washington must have a small loan endorsement. This includes loans made through the use of the internet, facsimile, telephone, kiosk, or other means. In the consumers’ favor, this means that if a payday lender violates the law, the consumer does not have to pay back the loan.
“We have an obligation to protect consumers from predatory lending practices,” said Senator Jean Berkey, D-Everett. “Fraud, deception, and misrepresentation will not be tolerated in Washington.”
The enhancement makes the enforcement tools for the check cashers and sellers law comparable to those for all other non-depository laws enforced by DFI. The expansion includes the enhanced ability to regulate against unlicensed internet lending, forgery, fabrication of documents, bait and switch, false advertising, written and oral misrepresentations, and unlicensed activities. In addition to any other penalties for a violation, any transaction is uncollectible and unenforceable.
“Electronic loans are a growing part of the payday lending business,” said Director Jarvis. “This bill will be a tremendous help in addressing violations of payday lending laws. We thank Senator Berkey for her generous support to champion legislation expanding consumer protection in Washington.”
The department takes a pro-active approach to educating consumers about payday lending. In March, following numerous campaigns in English, DFI launched a statewide Spanish PSA campaign in partnership with Uriel Iniguez of the Governor’s Commission on Hispanic Affairs. In addition, DFI places informational print advertising in community newspapers across the state.
The campaigns encourage consumers to visit the department’s website to see if a payday lender is licensed to do business in Washington.
More information about payday loans is available on DFI's website.