Examination information, frequently asked questions, and resources for Washington Consumer Loan Companies.
Initial Compliance Reviews
The Initial Compliance Review Entry Letter is sent to the new licensee prior to a preliminary examination. The requests in the Initial Compliance Review Entry Letter will be completed by the licensee and returned to the Department prior to the preliminary examination.
- Initial Compliance Review Entry Letter – Mortgage Loans
- Initial Compliance Review Entry Letter – Personal Loans
Consumer Loan Manager's Questionnaires
The Manager’s Questionnaire is sent to the licensee prior to a routine examination. The Manager’s Questionnaire will be completed by the licensee and returned to the Department prior to the examination.
- Information Security Resources
Resources regarding protecting personal information.
Common Examination Findings
- Failure to license underwriting/processing managers
Under the Consumer Loan Act, any day to day operational manager who directly supervises loan processors or underwriters must hold a loan originator license. The license can be from any state. WAC 208-620-301.
- Failure to complete loan documents provided to borrowers.
Licensees much ensure all loan documents provided to borrower are accurate and complete. See: WAC 208-620-550(8)
- Failure to provide accurate privacy policies.
Licensees much ensure all privacy policies provided to borrower are accurate and complete. See: Regulation P, 12 CFR, Subpart A, Section 1016.4
- Used terms such as “Lowest fees” or Best rates” in advertisements.
Licensees must not describer rates as “lowest, “best,” or other similar words which cannot be proven to be actually available at the time they are advertised.
See: WAC 208-620-630(5)
Consumer Loan Company Examination FAQs
Answers to common questions about examinations conducted by DFI.
- Do Loan Originators operating under the Consumer Loan Act need a license?
As of July 1, 2010, all mortgage loan originators working for consumer loan act (CLA) companies must be licensed by the Department of Financial Institutions (DFI). To obtain additional information on application requirements and the requirement to maintain a loan originator license, visit: DFI's loan originator page.
- As a licensee, can I make reverse mortgages under the CLA?
Effective July 26, 2009, a company licensed under the CLA can make reverse mortgages. The Engrossed House Bill 1311 is the law that implemented reverse mortgages in Washington State. The provisions in sections 12 and 13 of Engrossed House Bill 1311 allow consumer loan companies to make Home Equity Conversion Mortgages (HECM). Licensees need approval from the Department prior to offering a proprietary reverse mortgage product.
- As a licensee, do I need a separate license for loan modifications?
No, you do not need a separate license. Companies and individuals providing loan modification services in Washington must be licensed as mortgage brokers, consumer loan companies, or loan originators. Advance fees are permitted but must be deposited into a trust account. Visit DFI's loan modification services page for more information.
- Do licensees need a Disaster Recovery and Information Security Plan?
Yes. You are required to maintain written policies and procedures detailing your response to any event that results in damage or destruction to your records. You are also to address the security of your customer information. See: WAC 208-620-531 and Gramm Leach Bliley Act, Title V, Subtitle A, Section 501.
- Are licensees required to establish a Banks Secrecy Act/Anti-money Laundering program?
Yes. As of August 16, 2012, financial institutions are required to establish anti-money laundering programs and report suspicious activities under the Bank Secrecy Act.
See: The Financial Crimes Enforcement Network, Department of the Treasury, 31 CFR Section 1029.210
Financial Examiner Supervisor
Customer Service Supervisor