The 2025 legislative session has passed the halfway mark, and lawmakers have yet to move to the main event: the development and adoption of operating, capital, and transportation budgets for the 2025-27 biennium. Governor Ferguson is trying to set the tone that budget reductions and improved efficiency should be the priority in closing the budget gap, a stance that is not entirely aligned with his fellow Democrats in legislative leadership. While discussions are going on behind the scenes, the release of legislative budget proposals and the negotiations on them will begin in earnest following the March 18 release of updated revenue and caseload forecasts.

In the meantime, the action for the next week turns to the floors of the two chambers, as legislators act on bills that have survived the policy and fiscal committee cutoffs. Bills must be voted out of their House of origin by next Wednesday, March 12. Those proposals that failed to meet those deadlines are now dead for the session unless declared “necessary to implement the budget” (NTIB). Approximately 50 bills that WBA was tracking at one point in the session fall into that category, shrinking the range of legislation we must continue to monitor. Even as the range of proposals narrows, plenty of serious issues still demand our attention.

Speaking of serious issues that demand our attention, please consider attending the ABA’s annual Washington Summit, which will be held in D.C. from April 7 to 9. The agenda and registration information can be found here.

Meanwhile, here are updates on key bills under consideration in Olympia.

Interchange Fees

Several bills were introduced to address interchange fees and the treatment of employee tips paid by credit cards. The Senate Labor & Commerce Committee did not vote on SB 5070 before cutoff, so it is dead for this session. Meanwhile, HB 1623 was originally written to prevent employers from deducting interchange fees from an employee’s tips paid by credit card. The bill was amended to focus on capping interchange fees and then voted out of the Appropriations Committee. It is currently in Rules but is not expected to move forward. Nevertheless, we are encouraging WBA members to contact their representatives and explain the problems with the proposal. We will continue to watch the issue closely to ensure it doesn’t move forward.

Financial Education 

Financial education remains a top priority on WBA’s proactive legislative agenda. While the Senate bill (SB 5080) we have been working on with the State Treasurer’s Office failed to advance before cutoff, a House version (HB 1285) passed the House on Wednesday evening by a 94-3 vote and now heads to the Senate, where we hope it can avoid the same fate as its companion. 

Credit Union Taxes

The bill that would create a new B&O tax on credit unions in Washington, HB 1506, sponsored by Rep. Amy Walen, is a measure with budget implications, so it will remain alive for consideration throughout the session. It 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. While we remain unsure whether the bill has the momentum to make it through the process, it has gotten the attention of some lawmakers.

Fraud Protections

HB 1900 would have required financial institutions to take on new responsibilities to combat financial fraud against vulnerable consumers, especially senior citizens. However, it failed to move forward before the committee cutoff and is now dead for this session. While this bill had several problems, this issue is likely to resurface in future sessions.

Medical Debt

Legislation (SB 5480), similar to a law recently passed in California, prohibits the inclusion of medical debt in credit bureau reporting. It passed the Senate with a 35-12 vote and moved to the House Consumer Protection & Business Committee. Because we have confirmed that it exempts general-purpose credit card debt from reporting and applies only to cards issued exclusively and solely for the payment of medical expenses, we are neutral on the bill. 

Other Issues

Here are just some of the other bills of interest that remain alive:

• SB 5496: Regarding home buying by entities, the language has clarified that a mortgage lender’s security interest is not subject to the limitations in the bill; it has moved to the Senate floor
• HB 1747: Prohibiting employers from asking a job applicant about prior criminal convictions until a job offer has been made. It is now in the Rules Committee. Note: It appears that financial institutions would be exempted from the statute.
• HB 1127: Concerning unclaimed property; it is in Rules.
• HB 1155: Noncompete agreements; it is in Rules.
• HB 1477: Washington Saves trust accounts; it is in Rules
• SB 5280: Regulation of virtual currency kiosks; has passed the Senate and moved to the House Consumer Protection & Business Committee
• SB 5314: Capital gains tax updates; passed Senate and now in House Finance
• HB 1319: Wealth tax – It would be considered NTIB if pursued
• HB 1170: Informing users when AI is used; in Rules
• HB 1217: Rent Control; in Rules
• SB 5109: Mortgage lending fraud prosecution account; it has passed the Senate and been referred to the House Appropriations Committee