Examination information, frequently asked questions, and resources for Washington Consumer Loan Companies.
Consumer Loan Manager's Questionnaire
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.
The Washington State Department of Financial Institutions (DFI) is concerned with the security of consumer information. In accordance with the federal Safeguards Rule (16 CFR Part 314) DFI is including an information security element in company examinations. Key information security topics will be addressed. The information security component of the examination will be performed separately from the other examination sections, but all examination sections will be included in one report. Please be prepared to provide documentation regarding your institution’s information security program during your next examination.
The following are resources regarding information security:
- Information Security Manager’s Questionnaire
- Information Security Basics
- Information Security Controls
- Information Security Topics
- Most Likely Suspects
- Protect These Records
- Resource List
Common Examination Findings
Failure to charge fees within tolerance from the Good Faith Estimate to the HUD-1 Settlement Statement.
Licensees must not charge fees outside the tolerance limits addressed in RESPA without a change of circumstance. See: Regulation X, 12 CFR Section 1024.7
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 Mortgage (HECM).
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