On March 25, 2009, the Governor of Washington signed into law Senate Bill 5164, which amends the Check Cashers and Sellers statute to further restrict the manner by which licensees may collect small loans. The bill will take effect 90 days after adjournment of the 2009 legislative session.

    Specifically, the bill prohibits a licensee from:

    • Threatening to take any legal action against a borrower that the licensee may not legally take.
    • Visiting a borrower’s residence or place of employment when collecting.
    • Impersonating law enforcement officials or making statements that might be construed as indicating an official connection with certain law enforcement or governmental agencies.
    • Communicating in a harassing, intimidating, abusive or embarrassing manner, including communicating at an unreasonable hour, with unreasonable frequency, by threats of force or violence or by use of offensive language. Collection communications will be presumed to violate the statute if they are made: (i) with a borrower or spouse more than three times in a single week; (ii) with a borrower at the borrower’s place of employment more than once a week or after the licensee has been informed that the borrower prohibits such communications; (iii) with a borrower or spouse at his or her residence between the hours of 9 p.m. and 7:30 a.m.; or (iv) with certain third parties except for purposes of acquiring location or contact information about a borrower.

    The bill also requires licensees to maintain logs of collection communications with borrowers.

    Contact us if you would like more information on the amendments or other requirements and restrictions under the statute with respect to licensees or small loans.

    DEALING WITH MULTISTATE DEBT COLLECTION COMPLIANCE? We routinely advise on collection-related activities and the regulated activities of creditors, third party debt collectors, debt buyers and loan servicers. We also publish an easy-to-use reference that compiles state and federal laws governing debt collection practices. The Debt Collection Digest is organized topically, includes the federal Fair Debt Collection Practices Act and Commentary for easy cross-reference, and covers ADAD and monitoring and recording statutes. The Digest covers both consumer and commercial collections and includes a detailed analysis of statute applicability, as well as supplemental information such as codes of conduct. Creditors, subsequent holders, third party collectors, debt buyers and loan servicers should find the Digest an invaluable resource for collection program development, management and regulatory compliance. Contact us for details.

    • Margaret Stolar and Charles Gall