Message from Deb Bortner, Director of Consumer Services:
All payday loans made by Washington licensed lenders must go through the Veritec database unless you are licensed in another state and are following that state’s law when making a loan to a consumer in that state.
Q: If a borrower from another state comes to my business located in Washington and wants a payday loan, must I process that request and loan through the Washington required Veritec database?
A: Yes. As a licensed Washington payday lender, the law regulating payday loans applies to your business, regardless of where the borrower lives.
Communication from this agency dated September 11, 2009, stated that:
"... all ‘payday lenders’ making loans to Washington residents are required to begin using the Database for all transactions ..."
This communication was not complete.
For example, when a borrower drives from Idaho into Washington to obtain a loan from a licensed payday lender in Washington, the lender must process the loan through the database. In another example, a Washington licensed payday lender provides internet payday loans to consumers living in Idaho. If that payday lender is also licensed in Idaho, the Washington licensed payday lender must follow Idaho’s law for payday lenders for that transaction. If the payday lender is not licensed in Idaho and is only licensed in Washington, the lender must process the loan through the database.
Complete information for lending to consumers inside Washington was provided to you in the Welcome Packet provided to you during mid-October, 2009. The introductory letter in that packet stated:
"Licensed payday lenders (‘licensees’) regulated by the Washington State Department of Financial Institutions (‘Department’) are required to use a statewide database beginning on January 1, 2010 ..."
If you have been making loans to consumers who reside outside of the State of Washington and you have not been complying with the Washington law on payday lending for those transactions and you are not licensed to provide payday loans in that other state, you must stop that practice and make all payday loans in compliance with either Washington law, including the use of the database, or the law of the other state. Effective February 1, 2012, any loans made that do not comply with this communication may subject your company to administrative action.
If you have any questions please call Cindy Fazio at 360-902-8800.
Deb Bortner, Director Consumer Services