Department of Financial Institutions Continues to Attempt to Regulate Attorneys

Six months ago the Department of Financial Institutions (DFI) attempted to regulate the activities of an attorney engaged in the short sale business. The DFI ignored the fact that attorneys are solely regulated by the Washington State Supreme Court. The DFI backed down eventually, and the attorney continues to provide short sale assistance to homeowners in need.The Department of Financial Institutions has done it again, however. This time the DFI is asserting that it can regulate the activities of attorneys engaged in home loan modifications. It is asserting that the attorneys were engaged in the unauthorized practice of law. Accordingly, it asserts, it may regulate the attorneys as they are acting outside the jurisdiction of the Supreme Court.The Supreme Court has ultimate jurisdiction over the activities of attorneys. That means that it is not up to the Department of Financial Affairs to determine whether or not the attorneys engaged in the unauthorized practice of law. That is a charge against the attorneys’ licenses, and must be brought by the Bar Association and ultimately heard by the Supreme Court. This attempt to extend the jurisdiction of the DFI is either a display of incompetence by their attorneys or a power grab by a government department that accepts no limitations to its authority. In either case, it is a serious misuse of governmental authority and a monumental waste of public resources.