On April 20, Washington Governor, Jay Inslee, signed into law HB 1311 creating new regulations for credit repair organizations (CROs) in the state. Among other things, the new law outlines requirements for CROs, which include the following:
- Provide monthly statements to the consumer that detail services performed. Statements must include an accounting of the consumer funds and copies of letters sent on behalf of the consumer;
- Obtain prior written authorization before sending a communication on behalf of the consumer;
- Satisfy written communication requirements when communicating on behalf of a consumer;
- Provide “Consumer Credit File Rights” disclosures and other certain disclosures to consumers regarding their right to review their files; and
- Simplify the cancellation process with CROs to be simpler and easier to cancel.
The new law goes into effect on July 23.
Putting It Into Practice: While some states now appear to be revising their CRO laws, CROs have been the recent target of federal regulators (see our past blog posts here, here, here, and here). With this additional layer of state scrutiny, CROs should carefully consider changes to their operations to be in line with these requirements, while simultaneously ensuring compliance with the federal counterparts under Section 5 of the FTC Act, the CFPA, Credit Repair Organizations Act, and the TSR.