Washington State Department of Financial Institutions

Consumer Loan Act FAQs

Answers to frequently asked questions regarding the Consumer Loan Act RCW 31.04 (CLA).

Terminology

MBPA - Mortgage Broker Practices Act RCW 19.146
CLA - Consumer Loan Act RCW 31.04


1) Who can broker reverse mortgages in Washington?

License holders under both the CLA and MBPA can broker reverse mortgages.


2) What activities can a licensed mortgage broker engage in under the MBPA without triggering the license requirements of the CLA?

Broker – assisting borrowers, or holding yourself out as able to assist borrowers, in obtaining a residential mortgage loan. Loans close in the name of the lender.

Table Fund – "Table-funding" means a settlement at which a mortgage loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. The mortgage broker originates the loan and closes the loan in its own name but the funds are provided at the settlement by a lender to whom the closed loan is assigned. The mortgage broker does not own the loan at the end of the settlement. See also WAC 208-660-006.


3) Do Check Cashers and Sellers licensed under chapter 31.45 RCW have to license under the CLA?

No. Licensees under the Check Cashers and Sellers Act, chapter 31.45 RCW, do not need a license under the CLA.


4) Am I exempt from the MBPA  or CLA if I am approved by Fannie or Freddie?

No. Due to the changes brought about by SB 6471 (chapter 78, Laws of 2008), your approval by Fannie or Freddie does not exempt you from the licensing requirements of the MBPA or CLA for your brokering or lending activities. As a licensed mortgage broker you may act as a broker or table funder. As a licensee under the CLA, you may fund loans with interest rates of no more than 25 percent, you may broker loans to other lenders, and you may purchase loans on the secondary market.


5) If I make a loan to a borrower in the form of a check, can I charge a fee to cash the check for them?

No. The CLA does not allow you or your affiliates to charge the borrower a fee for cashing a check that is the proceeds of a loan you made to the borrower. If you also hold a licensee under the Check Cashers and Sellers Act, that act also prohibits you from charging the borrower a fee to cash the check you gave them for the small loan. See WAC 208-630-551.

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