One week into the 2024 legislative session, the list of bills covered by WBA and the United Financial Lobby continues growing in number and variety. We are still more than two weeks from the first cutoff, and the deadline for bills to pass out of policy committees in their house of origin is a critical milestone that will help wind down that list. 

The session moves very rapidly, and bills are still being introduced and changing every day. As you read below, if there is another issue or topic that is not included in this list but is important to your organization, please do not hesitate to let us know. We also host weekly legislative update calls during session for our GR Committee, if you are interested in learning more, please let me know.

Taxes

Although state revenue collections continue to outpace projections, new and increased taxes are being proposed. These include HB 2276, which would increase the real estate excise tax on transactions over $3 million, which is being pitched as a "mansion tax" but would significantly impact an already struggling commercial real estate sector. We will closely monitor the business community's response to this proposal and engage if appropriate. So far, there has been little action on SB 5493, this year's version of the proposal to eliminate the B&O tax exemption for interest income on first mortgage loans. We will monitor this bill closely and coordinate opposition if it begins to move.  

Artificial Intelligence

We are now seeing the first proposals in response to lawmakers' desire to address the uncertainties created by the rapid growth of artificial intelligence technology. SB 5838 would establish an AI task force to identify issues and develop state regulatory responses. As currently proposed, it would consist of 42 members, none of whom would represent the financial services industry. We have been told that this is because our industry is not intended to be a focus of the task force efforts, but we are talking with other stakeholders to determine what if any, role we should try to play. Another bill that could have unintended consequences is HB 1951, imposing additional requirements on an entity that uses algorithms in "consequential decisions." Our concern is that some analytic tools banks use could fall under an overly broad definition of artificial intelligence, even though we have been assured that this is not the intent of the bill sponsor. Additionally, we will be pointing out that most, if not all, of the requirements the bill would impose are already addressed by our compliance with various federal regulations, making an exemption like the one we have obtained in various data privacy bills appropriate.  

Other Issues

As the session progresses, we expect to have a clearer picture of the most significant issues. At this point, WBA and the UFL have identified the following issues for tracking: 

• HB 2094, HB 2095, and SB 5988 are bills dealing with administering and regulating consumer gift cards and loyalty programs and setting out conditions under which the state could claim outstanding balances as unclaimed property. Several questions are being raised about these bills, including how these proposals would impact bank reward programs, and we are monitoring the debates closely. 
• HB 2081 / SB 5968 regarding home equity sharing agreements. There are concerns that many of these programs represent anti-consumer and predatory lending schemes. We will monitor the legislative response to ensure it does not disrupt the mainstream lending market; however, our members are not the intended target.
• SB 5855 is a proposal to require "plain language" user agreements. This proposal is vague and would raise serious compliance challenges for financial institutions so that we will share our concerns.
• SB 5509, which would create a statewide infrastructure bank. We are not seeing much action on this issue so far this session, but we will continue to watch closely and engage if it starts to move. 
• HB 1915, which would expand state financial literacy programs and requirements for high school graduation, is legislation we support.
• HB 1885 would prohibit "foreign-influenced" corporations from making political contributions in the state. The bill's definition of "foreign influence" is so restrictive that it would effectively ban any publicly traded corporation from engaging in the electoral process in Washington. Fortunately, despite having a surprising number of House sponsors, the bill does not appear to have much momentum. 
• HB 2149 would prohibit sharing or selling consumer data gathered at "the point of sale" unless expressly authorized by the customer. The sponsor has indicated that financial services are not the bill's target. Still, the language in the bill is vague, and we will be providing input to ensure that it would not impose an additional compliance burden on banks.
• HB 2072, is AG request legislation to increase penalties imposed on organizations that violated anti-trust laws substantially. While the proposal would not expand the definition of anti-trust behavior, just the penalties imposed, this is usually a federal issue, so we will be working to understand the practical implications of the legislation.

As the session progresses, we will continue providing you with weekly updates on these and other bills. If you have any questions or your bank is concerned about an issue not mentioned here, please contact us. 

Thanks for all you do to support WBA,