Washington State Department of Financial Institutions

Consumer Loan Act Interpretive Letters Archive

2003-1999 | 1998 | 1997 | 1996 | 1995 | 1993-1992

The opinions expressed in the interpretive letters are informal and non-binding. These opinions reflect the position of the Division of Consumer Services (DCS) at the time they were produced. The DCS could learn of additional facts, which would cause us to change our position. The letters may also contain policy statements providing a written description of the current approach of DCS to implementation of a statute or other provision of law.

Readers are cautioned that the opinions in both the interpretive letters and policy statements may have changed because of statute or rule revisions or other additional facts presented. Consult your attorney for advice regarding the current state of the law and how it may apply to the issue or situation you have in mind.

Withdrawn Letters: View interpretive letters that have been withdrawn by the Division of Consumer Services.

Note: Only letters directed to all consumer loan companies and other interested parties are available by "hyperlink" from this page. If the letter you're interested in does not have a live hyperlink to the letter text, you may order a copy using the Public Records Request Form.

1997 Interpretive Letters

Number 97-02 CL
Date 1/29/97
Statute 31.04.105
Subject Definition of "borrower"
Summary "Borrower" means one or more persons who have signed the document creating an obligation to the lender. If both the husband’s and the wife’s income are necessary for the repayment of the debt, and both have signed the note, then both are obligated for the debt and both are eligible for insurance coverage allowed by 31.04.105(8).

Number 97-03 CL
Date 2/21/97
Statute 31.04
Subject Loan officer - telecommuting
Summary A loan officer who works at home performing some work for the employer need not be licensed under 31.04 RCW if: all contacts with customers take place at a licensed location; there would be no contacts, including visits or telephone calls,at the employee’s home; there would be no advertising or indications that the employee works at home; the employee is based at a licensed location near the employee’s home; and processing and closing of loan applications take place at a licensed location (or local title co. for closing.)

Number 97-04
Date 3-19-97
Statute 31.04
Subject CL Complaint Process
Summary If unable to process complaint in established time frame, e-mail complaints specialist proposing a new date not to exceed 30 days from the date of our original letter.

Number 97-05
Date 4-07-97
Statute 31.04.125(1)
Subject Secured by Real Estate
Summary A loan to value ration is not required for a loan to be secured by real estate. If the security interest may be enforced as a real estate mortgage or equivalent then the loan is secured by real estate.

Number 97-06
Date 4-14-97
Statute 31.04.105
Subject Loan Origination Fee
Summary Fees charged by a mortgage broker are an agreement between the borrower and broker. The lender is not required to include the broker fee in the loan origination fee.

Number 97-07
Date 4-09-97
Statute 31.04.105(4)
Subject Ten percent late charge
Summary Late charge allowed is 10% of payment amount not 10% of each dollar.

Number 97-08
Date 5-05-97
Statute 31.04.105
Subject Loan Origination fee and third party fees.
Summary Loan origination fee is 4% of the first $20M and 2% above $20M. Lender is only allowed to charge 3rd party fees as specified in 31.04.105(3). Third party fees not specified can not be included with the origination fee to determine compliance with 31.04.105(2).

Number 97-09CL
Date 7-01-97
Statute 31.04.165(2)
Subject Deceptive solicitations
Summary The use of "official-looking" solicitations is an injurious practice.

Number 97-11CL
Date 8-12-97
Statute 31.04.025
Subject Exemptions from Act
Summary State chartered bank is exempt from licensing under 31.04.025 based on FDIC insurance. No opinion given on RCW 19.52 or the Most Favored Lender Doctrine for loans secured by a second lien on residential real estate that exceed 12%.

Number 97-12CL
Date 8-27-97
Statute 31.04
Subject Use of Arbitration Agreements under 31.04
Summary Arbitration agreements promoted by federal law but DFI is concerned consumers would have to pay excessive up-front fees, required to travel unreasonable distance or wait unreasonable periods of time, limit the right of consumer to file complaint with DFI, and limit the authority of DFI to investigate and take appropriate disciplinary action when necessary.

Number 97-15CL
Date 8-29-97
Statute 31.04
Subject Request for payoff and loan history information.
Summary This interpretation was handled through the complaint process and addresses a violation of RESPA when a servicer does not honor the consumer’s request for loan history information. Although the letter was written and signed by Vivian Lee, it was done under the direction of Chuck Cross.

Number 96-14 CL
Date 11/12/97
Statute 31.04.025
Subject Exemptions from licensing
Summary RCW 31.04.-25 provides exemptions from the CL Act for FDIC-insured institutions both in making "check loans" and secondary mortgage loans. The Act doesn’t distinguish between the types of loans.

Number 97-16CL
Date 12-8-97
Statute 31.04
Subject Branch License Requirements
Summary 31.04.035 requires a license to make loans at rates authorized by chapter. The address of must appear on the license. The license is not transferable or assignable, therefore each branch must be licensed.