This week marks the first major milestone in the legislative process, with tomorrow being the deadline for bills to pass out of policy committees in their house of origin. The next cutoff will follow when bills must pass out of fiscal committees to remain alive. While bills deemed “necessary to implement the budget” are exempt from these cutoffs, they are nonetheless important to narrow the range of issues lawmakers will focus on moving forward. 

For those interested in what’s happening in “The Other Washington,” ABA’s annual Washington Summit will be held April 7–9. More information on the agenda and how to register can be found here.

In the meantime, here are quick updates on some bills WBA has been working on:

Interchange Fees

Several bills have been introduced to address interchange fees and the treatment of employee tips paid by credit cards. We have yet to see proposed amendments to SB 5070, but the bill is scheduled for a committee vote tomorrow. It is unclear whether the bill will focus on interchange fees or be amended to resemble the House approach, which addresses employer treatment of employees’ tip income and wouldn’t impact the banking system. That House bill, HB 1623, would prevent employers from deducting interchange fees from an employee’s tips paid by credit card. This proposal would place an additional financial burden on small businesses, and it faces strong opposition from the hospitality industry. It has been voted out of the House Labor & Workplace Standards Committee and is scheduled for a hearing next week in Appropriations.

Financial Education 

We have worked with the State Treasurer’s Office to support their latest version of a bill, which establishes a graduation requirement starting in 2033. SB 5080, for which WBA is leading a coalition of community organizations and nonprofits, was heard in the Senate Early Learning and K-12 Education Committee but has yet to receive a committee vote. Instead of advancing that bill, Committee Chair Sen. Wellman amended her computer science education bill, creating a new substitute for SB 5327, which now asks the state board of education to review potential changes to graduation requirements for both computer science state learning standards and state financial education learning standards. It removes the financial education graduation requirement and other items included in the original version of the legislation. It passed out of Committee on February 11 and was referred to Ways & Means.

Meanwhile, HB 1285 on the House side does something similar but was amended in the Committee to extend the implementation timeline. It was voted out of the House Education Committee earlier this week.

Credit Union Taxes

For the first time, lawmakers are considering creating a new B&O tax on credit unions in Washington. HB 1506, 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%. The Department of Revenue recently published a fiscal note estimating that the tax could raise more than $72 million over the next six years. In a hearing this week before the House Finance Committee, credit union representatives faced challenging questions as they tried to justify their exemption. We’re not sure whether the bill has the momentum to make it through the process, but it has gotten the attention of some lawmakers.

State Infrastructure Bank

In what has become an annual event in Olympia, Sen. Hasegawa has introduced another bill to create a state infrastructure bank. SB 5754 includes fiery rhetoric, such as directing the State Treasurer to pull money out of “Wall St. banks” and instead deposit it in this newly created institution. This idea has been around so long that the temptation could be to dismiss it out of hand, but we will continue to watch it closely and share concerns about the risks inherent in the idea. It was heard in the Senate Business, Financial Services & Trade Committee yesterday and is scheduled for a committee vote today.

Fraud Protections

Rep. Doglio (D-Olympia) introduced HB 1900, which would place new requirements and responsibilities on financial institutions to help combat financial fraud abuse of vulnerable consumers, especially senior citizens. The bill is a response to problems encountered by one of her constituents. We are working to make lawmakers aware of all the steps banks already take to protect their customers from fraud, as well as the requirements already in place, and point out that some of the bill’s provisions are impractical or could be counterproductive. Nevertheless, it has been heard in the House Consumer Protection & Business Committee and is scheduled for a committee vote tomorrow.

Budget and Taxes

The latest monthly Economic & Revenue Update was released on February 14. Major General Fund-State revenue collections for the January 11–February 10 period were $60.5 million (2.6%) higher than forecasted, reversing the previous month’s shortfall. However, cumulative collections since November 2024 are slightly lower than predicted.

Washington has some positive economic indicators: the unemployment rate is trending down, housing construction is improving, and vehicle sales are at their highest since 2021. Next month, we will see the next revenue and caseload forecast, which will pave the way for lawmakers to focus on their primary responsibility for the session and the passage of biennial operating, capital, and transportation budgets.

Other Issues

Here are just some of the other bills of interest:

• HB 1747: Prohibiting employers from asking a job applicant about prior criminal convictions until a job offer has been made (Note: it appears that financial institutions would be exempted from the statute.)
• HB 1127/SB 5316: Unclaimed property
• HB 1155: Noncompete agreements
• HB 1464: Home equity sharing agreements
• HB 1477: Washington Saves trust accounts
• SB 5314: Capital gains tax updates
• HB 1319: Wealth tax
• HB 1063: Earned wage access
• HB 1168: AI transparency
• HB 1671: Protecting consumer data privacy (Note: we have confirmed that this bill again contains an exemption for data regulated by the federal Gramm-Leach-Bliley Act.)
• HB 1170: Informing users when AI is used in consequential decisions
• HB 1217: Rent Control
• SB 5109: Mortgage lending fraud prosecution account