This was the second week of the Legislative Session, and lawmakers have begun hearing bills in the various policy committees. We are one month away from the first policy cut-off on February 21, when bills must move out of the committee of jurisdiction to continue in the process.
We hope you will consider joining us for Bankers Day on the Hill, which will be just a week before the first cut-off. This means it’s the perfect time to share your stories with lawmakers about how these policies will impact your bank and clients.
Interchange Fees
Thanks to a first-week hearing on interchange, we were off to a fast start. SB 5070, which would prohibit charging interchange fees on taxes, tips, and gratitudes, is sponsored by the committee chair. The WBA, along with the credit unions, Community Bankers of Washington, and Electronic Payments Coalition, all testified to the bill's complications, explaining how interchange works and how costly implementation would be. Merchants, retailers, and hospitality community members shared their support for the bill.
This bill is based on a law passed in Illinois prohibiting interchange fees on tips and taxes and purported to “ensure that workers receive their full compensation.” Subsequently, the Illinois bill was the subject of a legal challenge, and a preliminary injunction stayed its implementation. In conjunction with the Electronic Payments Association, a website (insert link) has been created to highlight some of the proposal's problems.
While no further action has been scheduled or taken on the bill, we continue to have meetings and discuss the issue in Olympia. We believe there is a way to accomplish the sponsor’s goal, which is to ensure that employees receive their full tips without involving interchange. Whether changes will be made through amendments to the bill or a new version altogether remains to be seen.
Financial Education
A long-standing priority for the WBA has been to get a financial education requirement into Washington schools. Last year, a bill almost reached the finish line before a last-minute deal couldn’t be brokered, and the bill died in the waning moments of the session.
This year, before the Session, we worked with the State Treasurer’s Office to support their latest version of a bill, which includes a graduation requirement and pushes the implementation timeline to 2033 to allow the State Board of Education time to include financial education in its Future Ready project. That bill, SB 5080, for which WBA is leading a coalition of community organizations and nonprofits, is scheduled to be heard in the Senate Early Learning and K-12 Education Committee next Tuesday.
On the House side, HB 1285 does something similar but with a faster implementation timeline. Rep. Skyler Rude, who sponsored last year’s bill that almost passed, also worked with stakeholders in the interim to update the bill. WBA testified earlier today in support of the bill.
Virtual Currency Kiosks
At the beginning of the Session, the Department of Financial Institutions alerted us that they would be working on legislation to regulate bitcoin ATMs, which are frequently the source of scams.
SB 5280, which was heard in the Business, Financial Services, and Trade Committee on Thursday morning, was introduced at DFI's request in conjunction with the Spokane Sheriff’s Office.
This bill aims to regulate virtual currency kiosks operating within the state. It includes new license requirements for operating these ATMs, consumer protections, such as daily transaction limitations similar to at-bank ATMs, and other reporting requirements. WBA testified in support of the bill.
There is also a House version, HB 1268, but it has removed certain provisions of the legislation, such as the daily withdrawal limitations, which we believe are necessary to make the legislation impactful for consumer safety.
Credit Union Taxes
For the first time, a bill would create a B&O on credit unions in Washington. HB 1509, sponsored by Rep. Amy Walen, would require that any credit union regulated at the state level that purchases a bank be subject to a B&O tax rate of 1.2%.
While the bill has not yet been scheduled for a hearing, Finance Committee Chair Rep. April Berg is open to hearing it.
Other issues
A long legislative session presents opportunities to consider a wide variety of bills. Hundreds have already been filed, and the total number will eventually reach the thousands.
Here are just some of the topics we know will be discussed or that have bills already introduced:
o HB 1127/SB 5316: Unclaimed property
o HB 1284: Investment income
o HB 1155: Noncompete agreements
o HB 1103: Unwanted calls and texts
o HB 1464: Home equity sharing agreements
o HB 1477: Washington saves trust accounts
o SB 5314: Capital gains tax updates
o HB 1319: Wealth tax
o HB 1063: Earned wage access
o HB 1168: AI transparency
o HB 1170: Informing users when AI is used
o HB 1217: Rent Control
o SB 5109: Mortgage lending fraud prosecution account
If you have any questions, please do not hesitate to reach out. We are happy to help. Thanks for all you do to support our advocacy efforts on behalf of the industry,