Washington Payday Loan Status
Washington allows payday lending with regulation. $700 max (or 30% of gross monthly income); fee up to 15% Rollover practice: no rollovers, 8 loans/year cap
| Rule | Washington Status |
|---|---|
| Legal status | LEGAL |
| Loan / fee cap | $700 max (or 30% of gross monthly income); fee up to 15% |
| Rollover rule | No rollovers, 8 loans/year cap |
| APR disclosure | APR disclosure required per TILA |
| Primary citation | RCW 31.45.073 |
Usury Cap and Enforceability in Washington
In Washington, the state usury law controls what fees a lender can legally charge. Loans that exceed the cap may be:
- Void in whole or in part -- some states void usurious loans entirely; others require repayment of principal only, with no interest or fees.
- Subject to statutory penalty -- many states allow recovery of 2x or 3x the usurious interest paid.
- Unenforceable via collection -- a lawsuit on a usurious loan can itself be an FDCPA violation.
If you suspect a Washington payday loan violates the cap, demand a full billing history and compare the effective APR (including all fees) against RCW 31.45.073.
Rollover Prohibitions in Washington
No rollovers, 8 loans/year cap
Rollovers are the mechanism by which payday lenders convert a 2-week loan into a multi-year debt trap. Each rollover typically requires a new fee equal to the original charge, so a $500 loan at 15% fee rolled 6 times costs $450 in fees alone -- 90% of the original principal.
Most regulated states now limit rollovers or require cooling-off periods:
- Database check. States like Florida, Kentucky, and Michigan require lenders to check a state database before issuing a new loan.
- Cooling-off periods. Waiting periods (24 hours to 30 days) between loans.
- Loan caps. Maximum number of loans per borrower per year.
If a Washington lender rolled a loan without authority under RCW 31.45.073, the rollover may be void.
APR Disclosure Rules in Washington
APR disclosure required per TILA
The federal Truth in Lending Act (TILA, 15 U.S.C. 1601) requires all lenders -- including payday lenders in every state -- to disclose the annual percentage rate before the loan is funded. Failure to disclose APR is itself a federal statutory violation with:
- Actual damages
- Statutory damages up to $5,000 (for closed-end credit)
- Attorney-fee shifting
A typical 14-day payday loan with a 15% fee has an APR of roughly 391%. Lenders must disclose that number, not the "15%" fee alone.
ACH Revocation Rights -- Applies in Washington
Under Regulation E (12 CFR 1005) of the federal Electronic Fund Transfer Act, you can revoke ACH authorization at any time in writing -- no state can override this federal right. The process:
- Send written revocation to the lender and to your bank.
- Bank must honor the revocation within 3 business days.
- Any withdrawal after revocation is an unauthorized transfer.
See our ACH revocation guide for a template letter that works in all 50 states.
Military Lending Act Overlay (applies in Washington)
If you are active-duty military or a covered dependent, the Military Lending Act (10 U.S.C. 987) caps consumer credit at 36% Military APR in every state, including Washington. Violations carry criminal penalties.
Critical MLA protections:
- 36% all-in APR cap
- No mandatory arbitration
- No roll-over / refinancing
- No prepayment penalty
- Written disclosure required
See full MLA rights.
Bankruptcy Discharge of Payday Loans in Washington
Payday loans are ordinarily dischargeable in bankruptcy. Exceptions:
- Luxury goods within 90 days (11 U.S.C. 523(a)(2)(C)(i)(I)) -- generally not an issue for payday advances, which are cash.
- Cash advances over $1,000 within 70 days before filing (11 U.S.C. 523(a)(2)(C)(i)(II)) -- presumptively non-dischargeable; courts can rebut with no-intent-to-deceive showing.
- Fraudulent intent at origination -- lender must sue within 60 days of 341 meeting under 11 U.S.C. 523(c).
For most Washington debtors with ordinary payday debt, Chapter 7 discharges the loan within 90 days. See 1328(f) refiling screener and the Washington means test.