Washington Amends Predatory Loans Prevention Act

Washington recently amended its Predatory Loans Prevention Act.  The amendment is effective June 6, 2024.

Among other changes, the amendments prohibit evading the predatory loan provisions, such as by making loans disguised as property sales, disguising loans proceeds as a cash rebate, or making a loan to a covered consumer with a greater rate of interest than permitted by the act regardless of whether the person making the loan has a physical location in Washington.  The amendment exempts non-recourse litigation funding, but does not exempt litigation funding that would require repayment in the event the person does not prevail in the underlying civil proceeding.

Under the amendment, any transaction (other than a residential mortgage loan) that is in violation of the act will be void and unenforceable, rather than only requiring the refund of certain fees or interest, as under the current version of the law.