House Bill 1599 amends chapter 18.28 RCW by updating definitions, adding multiple new sections, repealing RCW 18.28.165, 18.28.800, and 18.28.900, and prescribing new licensing, consumer-protection, recordkeeping, and enforcement provisions for providers of debt adjusting and debt resolution services. It creates a new licensing regime (effective July 1, 2026) requiring a nontransferable license tied to a primary business address, a surety bond (not to exceed $50,000), two-year license terms, specified application and renewal materials (including business identifiers, contracts, financial statements, and possible fingerprinting), and director/department authority to adopt rules, investigate records, and deny/suspend/revoke licenses for stated grounds. The bill imposes substantive limits and procedures governing fees, contracts, trust accounts, disclosures, and prohibited practices. For debt adjusting services it caps total fees at 15 percent of the total debt listed in the contract, limits per-payment retention to 15 percent, allows an initial charge up to $25 (part of the total fee), bars fees on rent and utilities, and allows a limited cancellation/default charge (6 percent of certain remaining indebtedness, not to exceed $25). Charging above those caps (except for accidental bona fide errors) voids the contract and requires return of payments not distributed to creditors. It requires separate trust accounts for consumer payments, at least monthly accounting to consumers, distribution of at least 85 percent of each payment to creditors at least once every 40 days, preservation of records for specified periods, notice requirements (including notifying consumers within five days if a creditor refuses payment), and a three-day consumer cancellation right for debt adjuster contracts. For debt resolution services the bill adds Sections 20–25 with rules allowing, under conditions, consumer funds to be placed in a dedicated account, permitting deferred-fee arrangements, requiring toll-free service, mandating consumer termination rights and specific notice and timing rules, and prohibiting a detailed list of abusive or deceptive practices (for example, taking powers of attorney to “resolve” debts, diverting creditor communications, initiating certain bank transfers, and misrepresenting results). It requires monthly and on-demand statements of accounting with specified content, website and review-disclosure rules, record retention and annual reporting to the department, and lists categories of exempt persons (including many professionals, financial institutions, certain nonprofits, and out‑of‑state consumers). Enforcement mechanisms include actions by the director through the attorney general and civil penalties for injunction violations (up to $1,000). Several parts of the bill text are incomplete in the provided extracts (including the end of some contract disclosure provisions, the department’s formal name in places, section 20’s full dedicated-account criteria, portions of Secs. 14, 19, and 25, and other amendments listed in the bill heading), so full details and some cross-references could not be confirmed from the supplied material.

If passed, the bill would impose a new state licensing regime for anyone offering debt adjusting or debt resolution services starting July 1, 2026, and add strict consumer protections and operational rules that will meaningfully change how providers operate. Providers will need to get a license tied to their primary business address, post a surety bond (up to $50,000), supply financial statements and fingerprints, keep long-term records, run separate trust or dedicated accounts, staff a toll-free line, give monthly accountings, follow clear contract disclosures, and meet limits on fees (generally no more than 15 percent of the debt listed and per-payment caps, plus an initial charge cap). The law also lets regulators suspend or revoke licenses, seek injunctions, and impose civil penalties, and it voids contracts and requires refunds if fee caps are exceeded except for accidental bona fide errors. The groups most affected are private debt-adjusting and debt-resolution firms, which will face higher upfront and ongoing compliance costs (licensing, bonding, background checks, recordkeeping, staffing and systems to segregate funds and produce statements), tighter limits on how much they can earn and how they collect fees, and greater legal risk if they fail to follow the rules. Consumers are likely to see stronger protections: clearer disclosures about tax and legal limits, the ability to cancel or terminate contracts, monthly accounting, and quicker return or distribution of funds on cancellation or default. Creditors, dedicated account service providers, and banks will also see new notice and account-handling requirements. The bill text in the provided facts leaves out the department’s formal name and some detailed provisions (including section 20’s full dedicated account criteria and parts of the contract-disclosure list), so a few operational details remain unclear.