Inside the Expansion of Commercial Lending Regs in Calif.

Nancy Thomas and Calvin Funk authored an article for Law360 discussing updates to the California Consumer Financial Protection Law (CCFPL), a first-of-its-kind commercial financing disclosure law that requires disclosure of key terms in connection with certain financing transactions by nonbanks, including specified bank partners.

According to the authors, the modified proposed regulations would make three changes to coverage of the UDAPP [unfair, deceptive, or abusive acts or practices] regulations.

“First, the proposed definition of ‘covered provider’ would state expressly that entities exempt from the CCFPL are exempt from the proposed regulations,” they wrote. “These exempt entities include licensed finance lenders and state and federally chartered financial institutions. There is no harm in including this provision, but there is nothing in the CCFPL that could authorize the DFPI [California Department of Financial Protection and Innovation] to issue regulations purporting to apply to entities that are exempt from the statute itself.”

Read the full article.