The Washington Department of Financial Institutions recently adopted provisions amending the Rules implementing the Consumer Loan Act (“CLA”) relating to the surety bond and capital requirements for nondepository licensees. The amendments are effective January 1, 2018.
The Rules describe the surety bond amount required for applicants and licensees. As amended, the Rules provide that surety bond amounts are based on loan origination volume from prior years, but if there is no prior year volume, the amount required at application is $30,000. If an applicant or licensee only originates residential loans, the amount is based on the annual dollar amount of loans originated (but if nonresidential loans are also originated, the amount is based on the combined volume). If an applicant or licensee only services residential loans, a surety bond requirement arises only if the servicer elects a surety bond in lieu of the required net worth. If an applicant or licensee only brokers residential loans, the surety bond amount at application is $30,000 and, thereafter, is subject to annual adjustment.
The Rules, as amended, also provide capital requirements for a nondepository applicant and licensee. An applicant or licensee operating as an approved servicer by a government sponsored entity (GSE) or government corporation (GC) must maintain a net worth that meet the standards set by the GSE or GC and, if sponsored by more than one GSE or GC, that meet the highest standard of the GSE or GC for which the applicant or licensee is approved. An applicant or licensee that is not approved by a GSE or GC must generally maintain a minimum net worth of between $100,000 to one million dollars depending on loan volume, although such applicant or licensee may maintain a one million dollar surety bond in lieu of this requirement.
A copy of the amendments is available here: http://lawfilesext.leg.wa.gov/law/wsr/2017/01/17-01-124.htm.