House Bill 1464 creates a new chapter in Title 31 RCW establishing a regulatory scheme for home equity sharing agreements. It defines such agreements as nonrecourse, nonloan arrangements for a homeowner’s primary dwelling, provides statutory definitions, and declares they are not mortgage loans under existing mortgage law. The bill requires anyone acting as a home equity sharing agreement originator in Washington to be licensed beginning July 1, 2026, with licensing application, fingerprint/criminal-history checks, investigation and license fees set by rule, and a required surety bond with a minimum penal sum of $30,000 (or an approved alternative capital option for Washington corporations). The Director of the Department of Financial Institutions must approve or deny complete applications within 90 days and may waive or substitute certain application requirements by rule. The bill imposes substantive consumer protections and transaction limits: originators must provide a director-prescribed disclosure form (with additional required itemized information), allow a minimum three-business-day rescission period, ensure minimum beginning home equity of 10% (except in home purchase transactions), obtain independent appraisals or disclose and obtain consent for affiliated appraisals, and cap the annualized cost of an agreement at 25%. Disclosures must include specified settlement examples at multiple timeframes and property-value scenarios. The act also lists prohibited contractual provisions and practices, including prohibitions on charging a penalty for early settlement, restricting a homeowner’s lawful use of the property (with limited exceptions), requiring undisclosed affiliated valuations, prohibiting refinancing in most cases, and charging amounts that exceed the statutory cost limits. The Director of the Department of Financial Institutions is given broad enforcement and supervisory powers and procedures: authority to deny, condition, suspend, or revoke licenses; impose fines up to $100 per day per violation; issue cease-and-desist and corrective orders; require refunds or restitution; remove or bar officers or principals; seek temporary cease-and-desist orders with expedited hearings; compel records and testimony via subpoena (including a procedure for court approval of subpoenas); conduct examinations and charge examination costs; and require licensees to maintain records for at least three years and file annual reports by March 1. Failure to file required reports incurs a $50 per day penalty recoverable by the Attorney General. The bill makes violations of the chapter an unfair or deceptive act under the Consumer Protection Act, allows the director to recover enforcement costs and attorneys’ fees, and states that any person who violates or knowingly aids a violation for which no penalty is prescribed is guilty of a gross misdemeanor. Administrative proceedings are governed by the Administrative Procedure Act. Important context gaps remain in the extracted text: the exact new chapter number in Title 31 RCW is not provided; parts of Sec. 7 (assessment and payment details), portions of the disclosure requirements in Sec. 10, and the full annual report content in Sec. 15 are cut off; fee amounts, assessment amounts, and rule definitions (including any specifications for the alternative capital option) are left to the director and are not shown here; and any additional penalty provisions referenced in the bill preamble do not appear in the extracted facts.

If enacted, the bill creates a new statewide regulatory system for home equity sharing agreements that will require anyone who originates these products in Washington to be licensed by the Department of Financial Institutions beginning July 1, 2026, pass fingerprint and criminal-history checks, post a surety bond (at least $30,000 or an approved capital alternative), pay investigation and license fees and yearly assessments, and follow strict consumer protections such as a three-business-day rescission period, a minimum 10% beginning homeowner equity (except for home purchases), independent appraisals or disclosed affiliated appraisals, a 25% cap on the annualized cost, detailed director-prescribed disclosures with multi-year settlement examples, limits on contract terms (no penalties for early settlement, restrictions on blocking refinancing, etc.), three-year record retention, annual reporting, and periodic examinations for which licensees will pay costs. The people most affected are originators and firms offering these agreements, who will face new upfront and ongoing costs (fees, bond or capital requirements, appraisal and disclosure costs, examinations, and potential fines or restitution), greater compliance and recordkeeping duties, and increased legal and reputational risk from license denial, suspension, fines up to $100 per day per violation, or criminal exposure for certain violations; homeowners will likely see stronger consumer protections, clearer pricing and example outcomes, and limits on abusive contract terms. Important details remain unspecified in the extracted text, including exact fee and assessment amounts, some penalty provisions, and portions of a key licensing/assessment section, so the full financial and enforcement impact on firms cannot be precisely determined from these excerpts.