Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-630 - Regulation of check cashers and sellers and small loans (payday lenders) › LICENSING REQUIREMENTS › Section 208-630-260 - Do I have any alternative to maintaining a surety bond?

Current through Register Vol. 24-14, July 15, 2024
With the approval of the director, you may substitute one of
							the following alternatives for the surety bond required under this chapter. Any
							alternative to the surety bond must secure the same obligations the surety bond
							would. The amount of a bond alternative substituted under subsection (1) or (2)
							of this section must be equal to or greater than the amount of the required
							surety bond.
(1)
Time
						deposit.
You may purchase and maintain a certificate of deposit assigned
						in favor of the director. The certificate of deposit must be issued by a
						financial institution in the state and whose deposits or shares are insured by
						an agency of the government of the United States. The deposit must be in an
						amount equal to or greater than the required surety bond. You are entitled to
						receive all interest and dividends on the certificate of deposit.
(2)
Demonstration of sufficient net
						worth.
You must demonstrate net worth of at least three times the amount
						of the required bond. You must notify the director within ten business days of
						any date upon which your net worth decreases below the required amount. If you
						fail to maintain the required level of net worth and continue to operate under
						a small loan endorsement, you must immediately obtain a surety bond and
						maintain it for five years after the date of noncompliance. During this
						five-year period, the director will not accept a demonstration of net worth in
						lieu of a surety bond.
(3)
Reports required.
If you maintain net worth in lieu of a surety
						bond, you must submit to the director an annual audited financial statement and
						a supplementary year-to-date financial statement within forty-five days after
						the close of each quarter, both prepared in accordance with generally accepted
						accounting principles. The financial statements must include at a minimum a
						statement of assets and liabilities and a profit and loss statement. The
						director may continue to require other documents, agreements or information
						necessary to properly evaluate and ensure that you comply with this
						section.
(4)
Bad debts and
						judgments.
If you maintain net worth in lieu of a surety bond you must
						not consider bad debts and certain judgments as assets. The director may
						approve exceptions in writing. You must charge off your books any debt upon
						which any payment is six months or more past due. You may not count as an asset
						any unpaid judgment more than two years old. Time consumed by an appeal from a
						judgment is not counted in the two-year limit.
(5)
Noncompliance.
If you do not
						comply with this section you must obtain and file with the director a surety
						bond in the required amount in WAC
						208-630-240 and
						208-630-250 by the date specified
						by the director.
Statutory Authority:
								RCW
								43.320.040,
								31.45.200, and   2009 c  510.
								09-24-089, §
											208-630-260, filed 12/1/09,
								effective 1/1/10. Statutory Authority:
								RCW
								   31.04.165,
								43.320.040,
								31.45.030,
								31.45.050,
								31.45.200. 05-22-009, §
											208-630-260, filed 10/21/05,
								effective 11/21/05.