Citing Hirst, lender limits real estate loans

MOSES LAKE — In the wake of last fall’s Hirst decision by the state Supreme Court requiring counties to approve all well permits — even exempt wells — has already forced one lender to limit the loans it makes on real property in the state.

“Starting Aug. 1 until further notice Washington Federal will not be lending on properties in the state of Washington that have had wells drilled after Oct. 6, 2016. This is a result of the Hirst Decision and the uncertainty it has created with water rights,” reads a Washington Federal internal memo.

The memo was given to Sen. Judy Warnick, R-Moses Lake, who then provided a copy to the Columbia Basin Herald.

“This only applies to wholesale loans, loans we make through brokers,” said Brad Goode, senior vice president of marketing and communications for Washington Federal.

The intent, Goode said, is to protect both customers and the bank given the uncertainty over water rights, since Washington Federal doesn’t repackage or resell its real estate loans.

“We keep every loan on our books,” he said. “We’re more in touch with borrowers when we hold on the loans.”

For consumer real estate loans — loans made directly to Washington Federal customers — Goode said a borrower would need to get certificates from the county that they have an adequate water right in order to secure a loan.

For Warnick, this is just one more reason there needs to be a permanent fix to the Hirst decision.

“This uncertainty over water rights is something I’ve been predicting,” she said. “I’m saddened to hear this, but it’s not unexpected.”

Warnick has been leading the state senate in an effort to pass legislation to “fix” the Hirst decision. Last fall, the state Supreme Court ruled in Whatcom County v. Hirst that counties had an obligation to determine whether well drilling had an effect of surface water before allowing even exempt wells to be drilled.

The ruling has hit counties with in stream flow rules — rules designed to set aside river and stream water for wildlife and Native American tribes — especially hard, though it is unclear how the decision applies to Grant County, which has little if any state-supervised surface water.

The failure by both houses of the state legislature to come to an agreement over Hirst has prevented the state from passing its $4 billion capital budget.

Warnick said at the end of June she had authored a senate bill which found bipartisan support that would restore the pre-Hirst status quo and yet also deal seriously with ecological and tribal concerns.

The bill passed the senate four times, Warnick said, but the house has yet to vote on the matter because it cannot get past the majority caucus for a floor vote.

“It we get to the floor, it’s likely to get passed. But there are very few rural Democrats in the legislature, so the majority of the party doesn’t understand the needs of rural Washington,” Warnick said.

Still, she said she is planning on heading over to Olympia and keep working toward a solution.

“I’d like to get a bill out,” Warnick said. “Planning on Wednesday to meet and come up with a solution.”

Charles H. Featherstone can be reached via email at countygvt@columbiabasinherald.com.