Overview

Find answers to common questions about operating as a check casher or payday lender in Washington State. This includes licensing requirements, loan terms, and fees.

Questions

Can I offer a small loan (payday loan) with a term of more than 45 days?
Yes. RCW 31.45.073 allows for a loan term of more than 45 days if both the borrower and licensee agree, and no additional fee or interest is charged.

Can I offer a small loan (payday loan) with periodic payments?
Yes, but you must follow the Act and Rules. The schedule of periodic payments must be in writing and maintained in your records. Multiple postdated checks corresponding to the payments are allowed.

Must I offer a statutory installment plan if the borrower requests it?
Yes, under RCW 31.45.084, you must provide the borrower with a statutory installment plan upon request. If the borrower is on a periodic payment plan, the term of the installment plan is based on the remaining loan amount.

Can I knowingly lend to a borrower with a statutory installment plan from another lender?
No. RCW 31.45.073(3) prohibits lending to borrowers with an existing loan in a statutory installment plan with any other lender.

How do I calculate the gross monthly income for borrowers?

  • Weekly – Multiply weekly income by 52, then divide by 12.
  • Bi-weekly – Multiply bi-weekly income by 26, then divide by 12.
  • Twice per month – Multiply income by 2.
  • Monthly – Use the gross monthly income from the pay stub.
  • Other – For self-employed individuals, handle on a case-by-case basis.

Do I need to calculate the APR for installment plans?
No, you don’t need to calculate the APR for the statutory installment plan since no fee is charged for it.

If a borrower rescinds a loan, does it count toward the loan limit?
No, rescinded loans do not count toward the eight-loan limit, nor do they incur a transaction fee.

If a borrower wants an earlier due date, can I allow it?
No, the due date must comply with WAC 208-630-501(1). Borrowers can pay off the loan early without extra fees.

Does the $400 cut-off for a statutory installment plan include fees?
Yes, the cut-off amount includes the outstanding principal and any allowed fees.

Can I extend a loan term based on a phone request?
Yes, you can memorialize a phone request using a form. Make sure the new due date is recorded in your database.

Can I mark a loan as in default before it’s actually in default?

No, you must wait until the borrower is actually in default before updating the database. Default means the borrower has not repaid the loan as per the agreement.

How do I calculate the number of loans in the past 12 months?
Look back 12 months from the loan request date to count the number of loans issued. The loan's origination date determines if it falls within the period.

Can I demand the first payment under a statutory installment plan on the day of agreement?
No, the first payment cannot be due earlier than seven days after the installment plan is signed.

Can a borrower use a new loan to pay off an existing loan?
No, you cannot allow a borrower to use a new loan to pay off a previous loan from the same lender or an affiliate.

If I give a loan as a check, can I charge a fee to cash it?
No, the Act prohibits charging a borrower a fee to cash a check issued for a small loan.

What documentation is acceptable for borrowers with alternative income?

  • For self-employed individuals – Business license, bank statements, or tax returns.
  • For commission-based income – Employment verification and bank statements showing deposits.
  • For regular deposits – Bank statements showing consistent deposits.
  • W-2 combined with employment verification.
If a borrower provides a benefits award letter with no deductions, what income amount do I enter?

Enter the full amount listed in the benefits award letter without adjustments for assumed deductions.

Does “within seven days” include the seventh day?

Yes, the seventh day is included when determining the loan due date relative to the borrower's next pay date.

What happens if a borrower in a statutory installment plan misses a payment?

  • You may deposit the borrower’s check as agreed without waiting.
  • You may charge a $25 default fee if the payment isn’t made within 10 days.
  • You may discontinue the installment plan after a missed payment.
  • Continue the installment plan if the borrower pays within 10 days, with no fees.
  • Mark the loan as default if the borrower fails to make payment after 10 days.