Washington Regulator Fines Mortgage Lender $75,000 Over Alleged Licensing and Compliance Violations
The Washington State Department of Financial Institutions (DFI) has finalized a consent order requiring mortgage lender West Capital Lending Inc. to pay a $75,000 fine and a $3,000 investigation fee to resolve allegations that it violated multiple provisions of the state’s Consumer Loan Act, including licensing, supervisory, reporting, and Bank Secrecy Act (BSA) compliance requirements. The company agreed to the settlement without admitting or denying the allegations.
Consent order resolves broad compliance investigation
The DFI issued the consent order on July 8, resolving allegations first outlined in a September 2025 statement of charges following an examination covering May 2022 through March 2024. Under the agreement, West Capital Lending must cease and desist from violating Washington’s Consumer Loan Act and implementing regulations, pay the monetary penalties, and comply with applicable state and federal requirements going forward. The company waived its right to an administrative hearing as part of the settlement while expressly making no admission of wrongdoing.
DFI alleged multiple licensing violations
The state alleged that the company engaged in several forms of unlicensed activity during the examination period.
According to the statement of charges, DFI found that:
- At least one individual assisted a borrower with a Washington residential mortgage loan application without holding the required mortgage loan originator license.
- The company accepted at least one residential mortgage loan application before obtaining its own Washington consumer loan license.
- At least six managers supervising licensed mortgage loan originators were themselves not properly licensed at the time.
Washington regulators also alleged that West Capital Lending failed to prepare and maintain at least 34 required supervisory plans for managers and did not maintain the required surety bond coverage during 2023 and 2024.
Examination identified broader compliance deficiencies
Beyond licensing concerns, DFI cited a range of operational and regulatory compliance issues.
The agency alleged the lender:
- Failed to submit timely and accurate annual reports.
- Did not provide certain required rate lock agreements within prescribed timeframes.
- Failed to provide complete and accurate closing disclosures and privacy notices in some instances.
- Failed to respond fully to examination requests.
- Used prohibited advertising claims regarding mortgage rates.
- Omitted required licensing information from multiple webpages.
- Violated loan estimate tolerance requirements.
- Improperly compensated at least one loan originator.
- Failed to ensure ongoing BSA/AML training and independent testing of its anti-money laundering program.
The DFI asserted these alleged violations constituted apparent violations of multiple provisions of Washington’s Consumer Loan Act and related regulations, as well as certain federal mortgage disclosure and anti-money laundering requirements.
BSA compliance remains an examination priority
While the matter centered largely on mortgage licensing requirements, the inclusion of alleged BSA/AML deficiencies underscores regulators’ continued focus on financial crime compliance programs.
According to the statement of charges, DFI alleged the company failed to ensure employees completed ongoing BSA/AML training and failed to conduct independent testing of its anti-money laundering program, both core elements of an effective compliance framework.
