Date of Adoption: May 29, 2001.

Purpose: To increase fees and assessments paid by consumer loan companies, check cashers and sellers, mortgage brokers, and escrow officers and agents to the Division of Consumer Services.

Citation of Existing Rules Affected by this Order: Amending WAC 208-630-021, 208-630-022, 208-630-023, 208-620-190, 208-680B-080, 208-660-010, and 208-660-060.

Statutory Authority for Adoption: RCW 18.44.410, 19.146.223, 19.146.225, 19.146.265, 31.04.165, 31.45.200.

Adopted under notice filed as WSR 01-07-083 on March 21, 2001.

Changes Other than Editing from Proposed to Adopted Version: Based on comments received, the division changed the rule in its final version to limit to two the number of automatic annual increases in the rate of assessments/fees: One on July 1, 2001, and one on July 1, 2002.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 8, Amended 7, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Effective Date of Rule: July 1, 2001.

May 29, 2001

John L. Bley

Director

OTS-4718.3

AMENDATORY SECTION(Amending WSR 97-09-035, filed 4/11/97, effective 5/12/97)

WAC 208-630-021   Application review and investigation fee.   (1) The director shall collect a fee of ((sixty-five dollars)) $66.81 per employee hour expended for services, plus actual expenses, for review of application and investigation of:

(a) New license applications;

(b) Additional locations;

(c) Change of control;

(d) Relocation of office;

(e) Voluntary or involuntary liquidation of licensee; and

(f) Small loan endorsement applications.

(2) The director may require a lump sum payment in advance to cover the anticipated cost of review and investigation of the activities described in this section. If the lump sum payment required exceeds the actual amount derived in subsection (1) of this section, the amount in excess shall be refunded.

[Statutory Authority: RCW 42.320.040 and 31.45.200. 97-09-035, 208-630-021, filed 4/11/97, effective 5/12/97.]

(2) The annual assessment rate is:

(a) For check cashers:

(i) If the volume of checks cashed is one million dollars or less, there is no annual assessment;

(ii) If the volume of checks cashed is over one million dollars, the annual assessment is ((five hundred dollars)) $513.95 per licensed location.

(b) For check sellers:

(i) If the volume of checks sold is one million dollars or less, there is no annual assessment;

(ii) If the volume of checks sold is over one million dollars, the annual assessment is ((five hundred dollars)) $513.95 per licensed location.

(c) For licensees with small loan endorsements, in addition to (a) and/or (b) of this subsection:

(i) If the volume of small loans made is one million dollars or less, there is no annual assessment;

(ii) If the volume of small loans made is over one million dollars, the annual assessment is ((five hundred dollars)) $513.95 per licensed location.

(3) For purposes of this section, "volume" includes all transactions made under this chapter and chapter 31.45 RCW by a Washington licensed check casher or check seller at all licensed locations.

[Statutory Authority: RCW 42.320.040 and 31.45.200. 97-09-035, 208-630-022, filed 4/11/97, effective 5/12/97.]

[Statutory Authority: RCW 42.320.040 and 31.45.200. 97-09-035, 208-630-023, filed 4/11/97, effective 5/12/97.]

(1) On July 1, 2002, the fee and assessment rates under WAC 208-630-021, 208-630-022, and 208-630-023, as increased in the prior fiscal year, will increase by a percentage rate equal to the fiscal growth factor for the then current fiscal year. As used in this section, "fiscal growth factor" has the same meaning as the term is defined in RCW 43.135.025. However, there will be no rate increase under this subsection (1) for assessments described in WAC 208-630-022 (2)(a)(i), (b)(i) and (c)(i).

(2) The director may round off a rate increase under subsection (1) of this section. However, no rate increase may exceed the applicable fiscal growth factor.

(3) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.

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(1) The consumer services program fund exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and

(2) That such course of action would be fiscally prudent.

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OTS-4719.3

AMENDATORY SECTION(Amending WSR 96-04-013, filed 1/26/96, effective 2/26/96)

WAC 208-620-190   Schedule of fees.   The director shall collect fees for services as specified below:

(1) Applications and certificates.

(a) A charge of ((ninety dollars)) $92.51 per hour for services plus actual expenses for review of application and attendant investigation for:

(i) New consumer loan company certificate of authority or licensed location certificate;

(ii) Branch licensed locations certificate;

(iii) Relocation of main office or branch;

(iv) Notice of change of control;

(v) Opinions rendered regarding interpretations of statutes and rules.

(b) A fee of ((one hundred dollars)) $102.79 for issuing the following certificates:

(i) Certificate of authority;

(ii) Licensed location certificate;

(iii) Certificate of good standing.

(2) Examinations. A charge of ((sixty-five dollars)) $66.81 per hour for regular and special examinations of the licensee's records. The director will submit a statement for the charges following the completion of any applicable examination. The charges must be paid within thirty days after the statement is submitted to the licensee.

(3) Annual assessment fee.

(a) An annual assessment fee based on adjusted total loan value as defined in (b) of this subsection. The amount of the annual assessment fee is ((.000169792)) 0.000174529 multiplied by the adjusted total loan value as calculated from the consolidated annual report for the previous calendar year.

(b) The "adjusted total loan value" is the sum of:

(i) The total unpaid balance of loans originated subject to the act that were retained or purchased by the licensee; and

(ii) The total unpaid balance of loans originated subject to the act that were sold by the licensee with servicing retained (if any); and

(iii) The total amount of loans originated subject to the act that were sold by the licensee during the previous calendar year with servicing released (if any).

[Statutory Authority: RCW 43.320.040, 31.04.045, [31.04].105, [31.04].145, [31.04].155 and [31.04].165. 96-04-013, recodified as 208-620-190, filed 1/26/96, effective 2/26/96. Statutory Authority: 1991 c 208 17. 91-22-035, 50-20-190, filed 10/30/91, effective 1/1/92.]

(1) On July 1, 2002, the fee and assessment rates under WAC 208-620-190, as increased in the prior fiscal year, will increase by a percentage rate equal to the fiscal growth factor for the then current fiscal year. As used in this section, "fiscal growth factor" has the same meaning as the term is defined in RCW 43.135.025.

(2) The director may round off a rate increase under subsection (1) of this section. However, no rate increase may exceed the applicable fiscal growth factor.

(3) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.

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(1) The consumer services program fund exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and

(2) That such course of action would be fiscally prudent.

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OTS-4720.4

AMENDATORY SECTION(Amending WSR 96-21-082, filed 10/16/96, effective 11/16/96)

WAC 208-680B-080   Escrow officer and agent fees.   The director shall charge the following fees:

Title of Fee	Fee
Escrow officer: First examination Reexamination Original license License renewal Transfer of license, name or address change or license activation Duplicate license	$((150.00)) 154.19 ((150.00)) 154.19 ((160.00)) 164.46 ((160.00)) 164.46 ((25.00)) 25.70 ((25.00)) 25.70
Escrow agent: Application and original certificate Renewal Late renewal with penalty Transfer of certificate, name or address change Duplicate certificate	((345.00)) 354.63 ((345.00)) 354.63 ((517.50)) 531.93 ((25.00)) 25.70 ((25.00)) 25.70
Escrow agent branch office: Application and original license Renewal Late renewal with penalty Transfer of license, name or address change Duplicate license	((345.00)) 354.63 ((345.00)) 354.63 ((517.50)) 531.93 ((25.00)) 25.70 ((25.00)) 25.70

[Statutory Authority: RCW 42.320.040 [43.320.040] and 18.44.320. 96-21-082, 208-680B-080, filed 10/16/96, effective 11/16/96. 96-05-018, recodified as 208-680B-080, filed 2/12/96, effective 4/1/96. Statutory Authority: RCW 18.44.320. 91-11-066, 308-128B-080, filed 5/16/91, effective 6/16/91. Statutory Authority: RCW 18.44.080 and 43.24.086. 90-03-099, 308-128B-080, filed 1/24/90, effective 3/1/90. Statutory Authority: RCW 43.24.086. 87-18-032 (Order PM 668), 308-128B-080, filed 8/27/87.]

(1) On July 1, 2002, the fee and assessment rates under WAC 208-680B-080, as increased in the prior fiscal year, will increase by a percentage rate equal to the fiscal growth factor for the then current fiscal year. As used in this section, "fiscal growth factor" has the same meaning as the term is defined in RCW 43.135.025.

(2) The director may round off a rate increase under subsection (1) of this section, However, no rate increase may exceed the applicable fiscal growth factor.

(3) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.

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(1) The consumer services program fund exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and

(2) That such course of action would be fiscally prudent.

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OTS-4721.4

AMENDATORY SECTION(Amending WSR 01-01-044, filed 12/8/00, effective 1/8/01)

WAC 208-660-010   Definitions.   As used in this chapter, the following definitions apply, unless the context otherwise requires:

(1) "Advertising material" means any form of sales or promotional materials to be used in connection with the mortgage broker business.

(2) "Affiliate" means any person who controls, is controlled by, or is under common control with, another person.

(3) "Application deposit" means a deposit in immediately available funds consisting of ((three hundred fifty dollars)) the equivalent of ten hours investigation fees under WAC 208-660-060 for each license applied for and ((one hundred seventy-five dollars)) the equivalent of five hours investigation fees under WAC 208-660-060 for each branch office certificate applied for. ((For example, an applicant requesting a license and two branch office certificates must submit an application deposit of seven hundred dollars (calculated by adding three hundred fifty dollars to the product of two times one hundred seventy-five dollars).))

(4) "Approved examination" means a written examination approved by the director.

(5) "Approved licensing or continuing education course" means a licensing or continuing education course approved by the director.

(6) "Borrower" means any person who consults with or retains a mortgage broker or loan originator in an effort to obtain or seek advice or information on obtaining or applying to obtain a residential mortgage loan for himself, herself, or persons including himself or herself, regardless of whether the person actually obtains such a loan.

(7) "Branch office" means a fixed physical location such as an office, separate from the principal place of business of the licensee, where the licensee holds itself out as a mortgage broker.

(8) "Branch office certificate" means a branch office license issued by the director to engage in the mortgage broker business as the branch office indicated in the certificate, pursuant to RCW 19.146.265.

(9) "Certificate of passing an approved examination" means a certificate signed by the examination administrator verifying that the individual performed with a satisfactory score or higher on an approved licensing examination.

(10) "Certificate of satisfactory completion of an approved continuing education course" means a certificate signed by the course provider verifying that the individual has attended an approved continuing education course.

(11) "Certificate of satisfactory completion of an approved licensing course" means a certificate signed by the course provider verifying that the individual has attended at least forty hours of class of an approved licensing course.

(12) "Consumer Protection Act" means chapter 19.86 RCW.

(13) A person "controls" an entity if the person, directly or indirectly through one or more intermediaries, alone or in concert with others, owns, controls, or holds the power to vote twenty-five percent or more of the outstanding stock or voting power of the controlled entity.

(14) A person is "convicted" of a crime, irrespective of the pronouncement or suspension of sentence, if the person:

Is convicted of the crime in any jurisdiction;

Is convicted of a crime which, if committed within this state would constitute such a crime under the laws of this state;

Has plead guilty or no contest or nolo contendere or stipulated to facts that are sufficient to justify a finding of guilt to such a charge before a court or federal magistrate; or

Has been found guilty of such a crime by the decision or judgment of a court or federal magistrate or by the verdict of a jury.

(15) "Department" means the department of financial institutions.

(16) "Designated broker" means a natural person designated by the applicant for a license or licensee who meets the experience, education, and examination requirements set forth in RCW 19.146.210(e).

(17) "Director" means the director of financial institutions.

(18) "Employee" means any natural person who:

Has an employment relationship, acknowledged by both the employee and the mortgage broker; and

Is treated as an employee by the mortgage broker for purposes of compliance with federal income tax laws.

(19) "Financial institution" means a federally insured bank, savings bank, savings and loan association, or credit union, whether state or federally chartered, authorized to conduct business in this state.

(20) "Financial misconduct" means without limitation:

Any conduct prohibited by the Mortgage Broker Practices Act;

Any similar conduct prohibited by statutes governing mortgage brokers in other states; and

Any similar conduct prohibited by statutes governing other segments of the financial services industry, including but not limited to the Consumer Protection Act, statutes governing the conduct of securities broker dealers, financial advisers, escrow officers, title insurance companies, limited practice officers, trust companies, and other licensed or chartered financial service providers.

(21) A person "holds oneself out" by advertising or otherwise informing the public that the person engages in any of the activities indicated, including without limit through the use of business cards, stationery, brochures, rate lists or other promotional items.

(22) "Independent contractor" or "person who independently contracts" means any person that:

Expressly or impliedly contracts to perform mortgage broker activities for a licensee;

With respect to its manner or means of performing the activities, is not subject to the licensee's right of control; and

Is not treated as an employee by the licensee for purposes of compliance with federal income tax laws.

(23) "Investigation" means an examination undertaken for the purpose of detection of violations of this chapter or securing information lawfully required under this chapter.

(24) "License" means a license issued by the director to engage in the mortgage broker business.

(25) "Licensee" or "licensed mortgage broker" means:

A mortgage broker licensed by the director; and

Any person required to be licensed pursuant to RCW 19.146.200 and 19.146.020.

(26) "Loan originator" means a natural person:

Who is a mortgage broker employee who performs any mortgage broker activities; or

Who is retained as an independent contractor by a mortgage broker, or represents a mortgage broker, in the performance of any mortgage broker activities.

(27) "Lock-in agreement" means an agreement with a borrower made by a mortgage broker or loan originator, in which the mortgage broker or loan originator agrees that, for a period of time, a specific interest rate or other financing terms will be the rate or terms upon which it will make a loan available to the borrower.

(28) "Material litigation" means any conviction in the prior seven years for a felony, or for a gross misdemeanor involving dishonesty or financial misconduct, and any litigation pending at any time during the prior seven years that would be relevant to the director's ruling on an application for a license, including but not limited to, the following types of litigation:

Criminal actions involving felony charges.

Criminal or civil actions involving dishonesty or financial misconduct.

(29) "Mortgage broker" means any person that for compensation or gain, or in the expectation of compensation or gain:

Makes a residential mortgage loan or assists a person in obtaining a residential mortgage loan; or

Holds himself or herself out as being able to do so.

(30) "Mortgage Broker Practices Act" means chapter 19.146 RCW and chapter 208-660 WAC.

(31) "Out-of-state applicant or licensee" means an applicant for a license or licensee that does not maintain a physical office within this state.

(32) "Person" means a natural person, corporation, company, partnership, limited liability company, or association.

(33) "Prepaid escrowed costs of ownership," as used in RCW 19.146.030(5), means any amounts prepaid by the borrower for the payment of taxes, property insurance, interim interest, and similar items in regard to the security property.

(34) "Principal" means any person who controls, directly or indirectly through one or more intermediaries, alone or in concert with others, a ten percent or greater interest in a partnership, company, association or corporation, and the owner of a sole proprietorship.

(35) "RCW" means the Revised Code of Washington.

(36) "Real Estate Settlement Procedures Act" means the Real Estate Settlement Procedures Act, 12 U.S.C. Sections 2601 et seq., and Regulation X, 24 C.F.R. Sections 3500 et seq.

(37) "Registered agent" means a person or persons located within this state that is appointed to accept service of process for an out-of-state licensee.

(38) "Residential mortgage loan" means any loan primarily for personal, family, or household use secured by a mortgage or deed of trust on residential real estate upon which is constructed or intended to be constructed a single family dwelling or multiple family dwelling of four or less units.

(39) "Subsidiary" means a corporation, company, partnership, or association that is controlled by another.

(40) "Third-party provider" means any third party, other than a mortgage broker or lender, that provides goods or services to the mortgage broker in connection with the preparation of a borrower's loan and includes, but is not limited to, credit reporting agencies, title insurance companies, appraisers, structural and pest inspectors, or escrow companies. However, "third-party provider" does include a third-party lender, to the extent it provides lock-in arrangements to the mortgage broker in connection with the preparation of a borrower's loan.

(41) "Transfer" means a sale, transfer, assignment, or other disposition, whether by operation of law in a merger or otherwise.

(42) "Truth in Lending Act" means the Truth in Lending Act, 15 U.S.C. Sections 1601 et seq., and Regulation Z, 12 C.F.R. Sections 226 et seq.

[Statutory Authority: RCW 43.320.010, 19.146.223. 01-01-044, 208-660-010, filed 12/8/00, effective 1/8/01; 96-04-028, recodified as 208-660-010, filed 2/1/96, effective 4/1/96. Statutory Authority: RCW 19.146.225. 95-13-091, 50-60-010, filed 6/21/95, effective 7/22/95. Statutory Authority: 1993 c 468 9. 94-03-009, 50-60-010, filed 1/7/94, effective 2/7/94.]

(2) Upon completion of any examination of the books and records of a licensee, the department will furnish to the licensee a billing to cover the cost of the examination. The examination charge will be calculated at the rate of ((forty-five dollars)) $46.26 per hour that each staff person devoted to the examination. The examination billing will be paid by the licensee promptly upon receipt. Licensees that were issued licenses prior to March 21, 1994, have prepaid in their initial license fee the cost of the first compliance examination of the licensee conducted by the department during the first two years after the date of issuance of the license.

(3) Each licensee shall pay to the director an annual assessment of ((five hundred dollars)) $513.95 for each license, and ((five hundred dollars)) $513.95 for each branch office certificate. The annual assessment(s) will be due no later than the last business day of the month in which the anniversary date of the issuance of the broker's license occurs.

(4) Upon completion of any investigation of the books and records of a mortgage broker other than a licensee, the department will furnish to the broker a billing to cover the cost of the investigation. The investigation charge will be calculated at the rate of ((forty-five dollars)) $46.26 per hour that each staff person devoted to the investigation. The investigation billing will be paid by the mortgage broker promptly upon receipt.

[96-04-028, recodified as 208-660-060, filed 2/1/96, effective 4/1/96. Statutory Authority: RCW 19.146.225. 95-13-091, 50-60-060, filed 6/21/95, effective 7/22/95; 94-23-033, 50-60-060, filed 11/8/94, effective 12/9/94. Statutory Authority: 1993 c 468 9. 94-03-009, 50-60-060, filed 1/7/94, effective 2/7/94.]

(1) On July 1, 2002, the fee and assessment rates under WAC 208-660-060, as increased in the prior fiscal year, will increase by a percentage rate equal to the fiscal growth factor for the then current fiscal year. As used in this section, "fiscal growth factor" has the same meaning as the term is defined in RCW 43.135.025.

(2) The director may round off a rate increase under subsection (1) of this section. However, no rate increase may exceed the applicable fiscal growth factor.

(3) By June 1 of each year, the director will make available a chart of the new rates that will take effect on the immediately following July 1.

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(1) The consumer services program fund exceeds the projected acceptable minimum fund balance level approved by the office of financial management; and

(2) That such course of action would be fiscally prudent.

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Washington State Code Reviser's Office