This bill amends existing law (RCW 31.45.073, 2009 c 510 s 3) to impose detailed limits and procedures for “small loans” made by licensed entities. It requires a director-issued small loan endorsement for each location before making small loans; sets due date rules tied to the borrower’s pay date; caps loan terms at 45 days from origination unless extended by agreement without extra fees or interest; and limits maximum principal (or aggregate outstanding principal to a single borrower) to the lower of $1,200 adjusted for inflation using the Seattle consumer price index or 30 percent of the borrower’s gross monthly income. The bill also limits borrowers to eight small loans from all licensees in any 12-month period, prohibits making a new small loan to a borrower in default or in an installment plan until the earlier of full repayment or two years from origination, and makes it a violation to knowingly lend more than the statutory maximum. The statute also caps fees and interest (aggregate fees not to exceed 15 percent of the first $500 of principal and 10 percent on any amount above $500), allows aggregation rules when multiple loans push a borrower’s principal over $500, permits taking one postdated check per loan as security (redeemable by the borrower with cash), forbids other property or title as collateral, and prohibits cashing or advancing on postdated checks beyond the purchase amount without a small loan endorsement. The director may adopt rules identifying fees not subject to these limits. The Department of Financial Institutions must calculate the inflation-adjusted dollar cap beginning January 1, 2027, and biennially thereafter and publish it in the Washington State Register to the nearest cent. The extracted text does not provide formal definitions for “licensee,” “director,” “small loan,” or “installment plan,” does not show enforcement penalties beyond noting that lending over the statutory maximum is a violation, and does not compute the future inflation-adjusted dollar amounts. Further related statutory context, licensing procedures, and enforcement provisions appear to be outside the provided text.

If enacted, businesses that make small, short-term loans (including check cashers and check sellers) will need a specific endorsement from the state regulator for each location and must follow tighter limits that will likely reduce how much they can lend, how long loans can last, and how much they can charge. Loans would be limited by a dollar cap tied to the Seattle-area consumer price index or 30 percent of a borrower’s gross monthly income (whichever is lower), terms generally capped at 45 days, fees limited to 15 percent on the first $500 and 10 percent on amounts above $500, no more than eight small loans per borrower in 12 months, and lenders could not make new loans to borrowers who are in default or in an installment plan until those are repaid or two years have passed. Check cashers would also need the endorsement to cash or advance on postdated checks beyond purchases, and lenders could accept only one postdated check per loan and must permit borrowers to redeem those checks. The Department of Financial Institutions will take on a recurring duty to calculate and publish the inflation-adjusted dollar cap every two years starting January 1, 2027, and the director can define any fees that are excluded from the caps. Practically, licensees will face increased compliance duties and likely lower revenue per loan and fewer repeat-borrowing opportunities for customers; borrowers will likely see cheaper, shorter-term loans and less ability to roll over debt. The text here does not define key terms like “small loan,” “licensee,” or “installment plan,” nor does it show enforcement details or the actual CPI-adjusted amounts that will apply after 2027.