Following closely on the heels of a Georgia law enacted in May, Connecticut and Florida have become the latest states to enact laws requiring providers of small business financing to provide disclosures to recipients—and in Connecticut’s case, to require certain commercial finance providers to register with the state. We examine the unique and interesting provisions
Georgia Enacts Commercial Finance Disclosure Law, Extending Legislative Trend
Providers of commercial financing should take note that Georgia has become the fifth US state to enact small business financing disclosure requirements since California started the trend in 2018. Georgia Senate Bill 90 was signed by Governor Brian Kemp on May 1, 2023, and takes effect January 1, 2024. The Georgia law applies to transactions of
Pennsylvania Targets Rent-to-Own Company Over Practices
Pennsylvania Attorney General Michelle Henry just announced an $11 million settlement with a rent-to-own provider resolving allegations of deceptive and predatory financing practices. The May 15, 2023, settlement, which is awaiting court approval, resolves allegations that Snap Finance LLC and its affiliates (“Snap”) disguised the nature of financing products it offered, concealed outstanding balances, engaged in deceptive collection practices, and used a web portal that allowed retailers to sign consumers up for financing without their knowledge, among other claims.
Continue Reading Pennsylvania Targets Rent-to-Own Company Over Practices
The CFPB Sticks to Its Guns, Finding State Commercial Finance Disclosure Laws Not Preempted in Final Determination
The US Consumer Financial Protection Bureau has finalized its December 2022 preliminary determination that commercial finance disclosure laws recently enacted in California, New York, Utah and Virginia are not preempted by the federal Truth in Lending Act. The CFPB’s final determination confirms for a wide range of small business financers and brokers that they are
NYDFS Adopts Final Commercial Finance Disclosure Rules
Small business financers and brokers active in New York must comply with New York’s Commercial Finance Disclosure Law (“CFDL”) by August 1, 2023, according to the new effective date the New York Department of Financial Services provided in final administrative rules on February 1.
In addition to the new effective date, the final rules include
Iowa Targets Out-of-State Bank Partner for Usury, Shedding Light on State’s Interpretation of DIDMCA Opt-Out
State-chartered banks lending to Iowa residents will want to take note of an Assurance of Discontinuance entered into in December between the State of Iowa and an out-of-state bank to settle claims that the bank charged usurious rates of interest to Iowa consumers. The settlement also highlights the Iowa Attorney General’s interpretation of the state’s
CFPB Preliminarily Determines State Commercial Financing Disclosure Laws Not Preempted by Truth in Lending Act
Small business lenders hoping for federal intervention will be disappointed to learn that the Consumer Financial Protection Bureau (CFPB) has reached a preliminary determination that New York’s new commercial financing disclosure law is not preempted by the federal Truth in Lending Act (TILA). The CFPB’s public notice indicates that it initially takes the same view
The Date Is Set: California DFPI Adopts Final Commercial Financing Disclosure Rules and Announces Effective Date
After an almost two-year regulatory process, the California Department of Financial Protection and Innovation (DFPI) adopted final administrative regulations to implement the state’s 2018 commercial financing disclosure law. Most importantly, the final rules come with a long-awaited effective date: December 9, 2022. The effective date honors prior DFPI statements that a six-month window for compliance
This Time It’s Forever: California Poised to Reinstate One-Loan Exemption
The California State Legislature provided commercial lenders with welcome news this week when the California Senate passed Senate Bill 577 (“SB 577”). If it is signed by the governor, SB 577 will reinstate the de minimis exemption from the California Financing Law (“CFL”) for lenders making a single commercial loan of $5,000 or more in
Marketplace Lender’s Lawsuit Against California DFPI Challenges “True Lender” Recharacterization
Marketplace lender Opportunity Financial, LLC has gone on the offensive against the California Department of Financial Protection and Innovation to protect its bank partnership program against challenge on a “true lender” theory. On March 7, 2022, OppFi filed suit against the DFPI to ask the state court to declare that FinWise Bank, a Utah-chartered bank,