New payday loan consumer protections in Washington

Just FYI for those in Washington. Got this from the DFI site.

"The Washington State Department of Financial Institutions is working to ensure timely implementation and enforcement of several new laws aimed at protecting consumers and providing more consistent regulation of its mortgage industry and payday loan company licensees.

“We’re pleased to be able to enforce stronger protections for consumers and more consistent licensing methods for our licensees,” DFI Director Scott Jarvis said. “These new laws will help make Washington a better place to live and do business.”

ESHB 1709, Chapter 510 Laws of 2009 (PDF)* Payday Loans
Effective Jan. 1, 2010
Limits the total loan(s) amount to $700 or 30% of the borrower’s gross monthly income.
Limits the number of loans a borrower can take to eight ( in a 12-month period.
Creates a single database for all payday loan companies to enter borrower data, thereby preventing lenders from making larger loans or more loans than is legally allowed.

Replaces the previous payment plan with an installment plan for borrowers who can not pay back their loan as agreed. The installment plan is available at the borrower’s request at any time before their loan is due. The installment plan provides a longer payback time with no additional fees. New loans may not be made to borrowers in default or in an installment plan on existing loans.

“This law will help DFI protect consumers while retaining access to these short-term loans for those who may not have access to alternatives,” DFI Director of Consumer Services Deb Bortner said.

SB 5164, Chapter 13 Laws of 2009 (PDF)* Payday Loan Collection Practices
Effective July 26, 2009
In the past, when a payday loan company collected its own debts it was not subject to Washington’s collection agency practices act which has many protections for consumers. With this law, consumers are protected from harassing or intimidating behavior when payday loan companies collect their own debts.
“Many of the complaints we receive regarding payday loan companies are of harassment or intimidating behavior,” Bortner explained. “This law makes such activities illegal in the State of Washington.”

I would be interested to know what the state defines as "harassing or intimidating behavior". Sounds like lot's of gray...

The law references the washington law governing collection agencies. It is written along the lines of the FDCPA but is specific enough that it is very hard for a CA to prove they were not harassing if they are.