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A Small Fix That Matters — Foreclosure Fairness Fee Clarity Passes Washington House

Posted by on March 3, 2026

Some advocacy work gets attention, while other important work happens quietly, and a key clarification that should pass the House today is a great example.

Last year the Washington Legislature created a Foreclosure Fairness Account fee to be paid by mortgage borrowers to fund foreclosure prevention and homeowner assistance services. Last year before it went into effect, incorrect guidance (at least, in our view and that of legal counsel) from the state Department of Commerce indicated that the fee should be treated as a finance charge.

While the fee itself would not meaningfully affect APR calculations for a home loan, credit unions and the GoWest compliance team flagged a more serious concern: some loan origination systems and reporting software are not designed to treat the fee as a finance charge since it meets all other criteria of government issued and collected fees. That lack of clarity created potential litigation risk or could have forced costly and unnecessary software changes to have it added in disclosure software.

In response, we immediately connected with the Department of Financial Institutions last summer and worked with legislators to ensure the statute would be clarified during the upcoming session. The clarification was included in a bill from Sen. Tina Orwall that passed the Senate earlier in session and cleared the House floor this afternoon. While it needs to go back to the Senate for a final vote due to amendment, the bill is very likely to go to the governor to be signed into law.

We’ll share more details, including the effective date, in an upcoming compliance bulletin. This is a good example of the many small, technical issues that rarely get attention, but where feedback from credit unions and collaboration among GoWest compliance and legislative affairs teams helps reduce risk, control costs, and keep the system working as intended.

Posted in Advocacy on the Move, Washington Advocacy.

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