Bill - Senate Bill 6250, Maximum Principal Amount of Small Loans (Washington Legislature, 2026)

Summary

Senate Bill 6250 of the 69th Legislature, 2026 Regular Session, State of Washington, is by Senators Kauffman and Nobles and is referred to the Committee on Business, Trade & Economic Development. The act relates to the maximum principal amount of small loans and amends RCW 31.45.073. The section text states that the termination date of a small loan may not exceed the origination date by more than 45 days and that a borrower is prohibited from receiving more than eight small loans from all licensees in any 12-month period. It also states that a licensee may charge interest or fees not to exceed in the aggregate 15 percent of the first $500 of principal.

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Full text

     S-3924.1

                                 SENATE BILL 6250


     State of Washington         69th Legislature      2026 Regular Session

     By Senators Kauffman and Nobles

     Read first time 01/21/26.   Referred to Committee on Business, Trade &
     Economic Development.




 1       AN ACT Relating to the maximum principal amount of small loans;
 2   and amending RCW 31.45.073.


 3   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 4       Sec. 1.   RCW 31.45.073 and 2009 c 510 s 3 are each amended to
 5   read as follows:
 6       (1) No licensee may engage in the business of making small loans
 7   without first obtaining a small loan endorsement to its license from
 8   the director in accordance with this chapter. An endorsement will be
 9   required for each location where a licensee engages in the business
10   of making small loans, but a small loan endorsement may authorize a
11   licensee to make small loans at a location different than the
12   licensed locations where it cashes or sells checks. A licensee may
13   have more than one endorsement.
14       (2)(a) A licensee must set the due date of a small loan on or
15   after the date of the borrower's next pay date. If a borrower's next
16   pay date is within seven days of taking out the loan, a licensee must
17   set the due date of a small loan on or after the borrower's second
18   pay date after the date the small loan is made. The termination date
19   of a small loan may not exceed the origination date of that same
20   small loan by more than ((forty-five)) 45 days, including weekends
21   and holidays, unless the term of the loan is extended by agreement of
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 1   both the borrower and the licensee and no additional fee or interest
 2   is charged. The maximum principal amount of any small loan, or the
 3   outstanding principal balances of all small loans made by all
 4   licensees to a single borrower at any one time, may not exceed
 5   ((seven hundred dollars)) $1,200, adjusted for inflation based upon
 6   changes in the consumer price index as provided in (b) of this
 7   subsection, or ((thirty)) 30 percent of the gross monthly income of
 8   the borrower, whichever is lower. A licensee is prohibited from
 9   making a small loan to a borrower who is in default on another small
10   loan until after that loan is paid in full or two years have passed
11   from the origination date of the small loan, whichever occurs first.
12       (b) Beginning January 1, 2027, and annually thereafter, the
13   department of financial institutions shall calculate the inflation-
14   adjusted maximum principal amount of any small loan, or the
15   outstanding principal balances of all small loans made by all
16   licensees to a single borrower, at any one time allowed under (a) of
17   this subsection, by calculating to the nearest cent using the
18   consumer price index. The department of financial institutions shall
19   publish the information on its website and in a press release. For
20   the purposes of this subsection (2), "consumer price index" means the
21   consumer price index for all urban consumers, all items, for the
22   Seattle area as calculated by the United States bureau of labor
23   statistics or its successor agency.
24       (3) A licensee is prohibited from making a small loan to a
25   borrower in an installment plan with any licensee until after the
26   plan is paid in full or two years have passed from the origination
27   date of the installment plan, whichever occurs first.
28       (4) A borrower is prohibited from receiving more than eight small
29   loans from all licensees in any ((twelve)) 12-month period. A
30   licensee is prohibited from making a small loan to a borrower if
31   making that small loan would result in a borrower receiving more than
32   eight small loans from all licensees in any ((twelve)) 12-month
33   period.
34       (5) A licensee that has obtained the required small loan
35   endorsement may charge interest or fees for small loans not to exceed
36   in the aggregate ((fifteen)) 15 percent of the first ((five hundred
37   dollars)) $500 of principal. If the principal exceeds ((five hundred
38   dollars)) $500, a licensee may charge interest or fees not to exceed
39   in the aggregate ((ten)) 10 percent of that portion of the principal
40   in excess of ((five hundred dollars)) $500. If a licensee makes more
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 1   than one loan to a single borrower, and the aggregated principal of
 2   all loans made to that borrower exceeds ((five hundred dollars)) $500
 3   at any one time, the licensee may charge interest or fees not to
 4   exceed in the aggregate ((ten)) 10 percent on that portion of the
 5   aggregated principal of all loans at any one time that is in excess
 6   of ((five hundred dollars)) $500. The director may determine by rule
 7   which fees, if any, are not subject to the interest or fee
 8   limitations described in this section. It is a violation of this
 9   chapter for any licensee to knowingly loan to a single borrower at
10   any one time, in a single loan or in the aggregate, more than the
11   maximum principal amount described in this section.
12       (6) In connection with making a small loan, a licensee may
13   advance moneys on the security of a postdated check. The licensee may
14   not accept any other property, title to property, or other evidence
15   of ownership of property as collateral for a small loan. The licensee
16   may accept only one postdated check per loan as security for the
17   loan. A licensee may permit a borrower to redeem a postdated check
18   with a payment of cash or the equivalent of cash. The licensee may
19   disburse the proceeds of a small loan in cash, in the form of a
20   check, or in the form of the electronic equivalent of cash or a
21   check.
22       (7) No person may at any time cash or advance any moneys on a
23   postdated check or draft in excess of the amount of goods or services
24   purchased without first obtaining a small loan endorsement to a check
25   casher or check seller license.

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