Washington Legislative Update: NWCUA Bills on the Move

Last week saw a lot of floor action Monday through Wednesday, right up until the 5:00 p.m. cutoff, to pass bills out of their houses of origin, and then it was back to policy committee hearings on Thursday and Friday. At the end of this update you will find a list of bills we have been reporting on which died with the cutoff.

NWCUA sponsored Senate Bill 5757 addressing credit unions’ corporate governance and investments received a hearing before the House Business & Financial Services Committee on March 13. Association staff testified on the bill, the committee having previously heard and passed the companion measure. The Community Bankers of Washington, who had testified with concerns on the companion measure related to CUSO loan and investment authority, signed in as neutral. The bill’s companion measure, House Bill 1871, is scheduled for a hearing before the Senate Financial Institutions & Insurance Committee on March 18.

Senate Bill 5300 which is DFI agency request legislation to amend the Washington Credit Union Act passed the Senate on March 9 by a vote of 49-0 and was then referred to the House Business & Financial Services Committee where it is scheduled for a hearing on March 17. Its companion measure, House Bill 1062 is scheduled for a hearing before the Senate Financial Institutions & Insurance Committee on March 18.

Debt Settlement Services

Engrossed Substitute Senate Bill 5321 concerns licensure of persons providing debt settlement services passed the Senate on March 10 by a vote of 27-22 and was then referred to the House Business & Financial Services Committee where it is scheduled for a hearing on March 18. The bill creates the Debt Settlement Services Act (Act) for services as an intermediary between an individual and one or more unsecured creditors for the purpose of obtaining concessions in the reduction in principal of the individual’s unsecured debt; and securing the discharge of such debt upon the individual’s performance of the negotiated concessions. A provider of debt settlement services must be licensed with the DFI in order to provide those services, renew annually, and the licensee must pay an annual assessment.

Before an individual agrees to pay for debt settlement services, the provider must disclose the following:

  • a good faith estimate of the amount of time necessary to achieve results;
  • the amount of time it will take before the provider will make bona fide settlement offers to the individual’s creditors,
  • an estimate of the amount of money the individual must save before the provider will make a settlement offer;
  • that the failure to make timely payments to creditors during the settlement process will likely adversely affect the individual’s creditworthiness and may result in collection action; and
  • to the extent the provider requests the individual place funds in an account, that the individual owns the funds and can withdraw from the debt settlement services at any time without penalty.

A provider may not receive any fee unless the provider has settled or reduced at least one debt under the settlement program and the individual has made at least one payment in furtherance of settlement with that creditor. The total fee, including any fee charged by a financial institution or third-party account administrator, may not exceed 20 percent of the total debt listed by the debtor on the contract.

DFI has the authority to ensure compliance with the Act and conduct investigations and examinations, enforce violations, and issue sanctions.

A person licensed to provide debt settlement services does not need to register as a debt adjuster. The Debt Adjusting Act is also amended to clarify that a provider of debt settlement services is exempt from that act.

Debt Adjusting Services

Substitute House Bill 1283 and its companion measure Substitute Senate Bill 5485 concern nonprofit organizations engaged in debt adjusting. SHB 1283 passed the House on March 10 by a vote of 98-0 and was then referred to the Senate Financial Institutions & Insurance Committee where it is scheduled for a hearing on March 19. The bills require a nonprofit organization engaged in debt adjusting to submit information to DFI by June 30, 2016, and again on June 30, 2017, including the following:

  • the number of debtors who terminated debt-adjusting services prior to settlement of all the debtor’s debts;
  • total fees collected from Washington debtors;
  • total fair share contributions collected from creditors;
  • detailed information regarding debt-adjusting contracts entered into and the resulting debt settlement from those contracts and fees charged;
  • for debtors who terminated services, the percentage of the debtor’s debt that was settled;
  • the number of debtors in the past three years whose debt was fully settled; and
  • the nonprofit organization’s form 990 or other statement including compensation information for the organization’s officers, directors, trustees, and employees.

DFI must make public the data received from nonprofit debt adjusters and submit reports to the Legislature no later than December 1, 2016, and again, on December 1, 2017.

The 15% cap on fees charged by a nonprofit debt adjuster does not include “fair share”, defined as creditor contributions paid to nonprofit debt adjusters by the creditors whose consumers receive debt-adjusting services from nonprofit debt adjusters and pay down their debt accordingly.

Electronic Signatures

Engrossed Substitute Senate Bill 5810 promotes the use, acceptance, and removal of barriers to the use and acceptance of electronic signatures by state agencies. The bill allows state agencies to accept electronic signatures with the same force and effect as that of a signature affixed by hand, and allows them to determine whether and to what extent they will create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures. The bill passed the Senate on March 5 by a vote of 48-1 and was then referred to the House State Government Committee where it is scheduled for a hearing on March 18. 

Uber/Lyft

Engrossed Substitute House Bill 2131 and Engross Substitute Senate Bill 5550 address regulating insurance for providers of commercial transportation services. The bills establish insurance requirements for providers of commercial transportation services using a personal vehicle. As part of the bills, a commercial transportation services provider (like Uber or Lyft) must include in their terms of service a requirement that drivers notify any lien holders that they will be using the vehicle for commercial transportation services that may violate the terms of their contract with the lien holder. ESHB 2131 passed the House on March 3 by a vote of 77-17 with 4 excused and was then referred to the Senate Transportation Committee. ESB 5550 passed the Senate on March 10 by a vote of 30-18 with 1 excused and was then referred to the House Business & Financial Services Committee where it is scheduled for a hearing on March 20.

Other Bills We Are Tracking

Unclaimed Property

Substitute House Bill 1551 is DOR request legislation which requires unclaimed property reports to be filed electronically beginning July 1, 2016. The bill passed the House on March 10 by a vote of 98-0 and was then referred to the Senate Government Operations & Security Committee where it is scheduled for a hearing on March 19.

Payday Lending

Engrossed Substitute Senate Bill 5899 which creates a small consumer installment loan regulated by DFI passed the Senate on March 10 by a vote of 30-18 with 1 excused and was then referred to the House Business & Financial Services Committee.

ABLE Act

Second Substitute House Bill 2063 requires the State Treasurer to convene a work group to design an ABLE (Achieving a Better Life Experience) program by July 1, 2015. The work group must include representatives from the Department of Commerce, the State Investment Board, the Washington Advanced College Tuition Payment Program, the Department of Social and Health Services, the Developmental Disability Endowment Governing Board, and the disability community. The ABLE design work group must provide a report to the Governor and the Legislature by November 1, 2015 that includes a recommendation of the appropriate lead agency for the ABLE program, an analysis of the appropriate investment instrumentality for ABLE account investments, an implementation plan for the ABLE program, and a recommendation regarding the composition and role of an ABLE advisory board. The bill passed the House on March 10 by a vote of 89-8 with 1 excused and was then referred to the Senate Health Care Committee.

Small Business Retirement Plan Marketplace

Engrossed Substitute Senate Bill 5826 creates the Washington small business retirement Marketplace in the Department of Commerce. The bill passed the Senate on March 11 by a vote of 29-20 and was then referred to the House Appropriations Committee.

Bills we were tracking which failed to pass out of their house of origin

  • HB 1239 and its companion measure SB 5492 Increasing tax exemption transparency and accountability
  • HB 1543 and its companion measure SB 5475 Concerning the first mortgage interest business and occupation tax deduction
  • HB 1872 Addressing credit unions’ capital. (NWCUA-sponsored legislation to set up the regulatory framework for state chartered credit unions to accept supplemental capital once approved at the federal level.)
  • HB 1923 Regulating income share agreements
  • HB 2134 Concerning the creation, extension, expansion, accountability, and transparency of state tax preferences
    HB 2150 Reforming the business and occupation tax to provide fairness and administrative simplicity
  • SB 5069 Making the unlawful possession of instruments of financial fraud a crime
  • SB 5611 Addressing excessive overdraft fees
  • SB 5968 Clarifying that the owner or holder of a trust deed, or the owner or holder’s designee, may initiate foreclosure proceedings
  • SB 5971 Establishing the Washington Publicly Owned Trust (WASHPOT) in order to create a financing infrastructure to implement Initiative Measure No. 502 (recreational marijuana)
  • SJM 8005 Requesting that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall act

Look for the Washington Legislative Week in Review each week in Anthem during legislative session which runs January 12 – April 26, 2015. If you have questions or comments, please contact Mark Minickiello, mminickiello@nwcua.org, 206.340.4812.

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