With California’s commercial financing disclosure laws becoming effective on Dec. 9, Andrew K. Alper of Frandzel Robins Bloom & Csato provides an updated and detailed guide to the new regulations.
Since September 2018, when Assembly Bill 375, otherwise known as the California Consumer Privacy Act of 2018, was enacted in California, commercial finance has contended with consumer-like disclosures required for certain commercial transactions required with respect to lending transactions in California. Other states, including New York and Utah, have followed California’s lead with respect to commercial finance disclosure laws, but the laws passed in New York and Utah are not yet effective as of the date of this article, while other states have only introduced bills for similar types of disclosure requirements in commercial transactions.
California’s disclosure law is codified in Financial Code §§22800 (the statutes). However, the law passed was only the framework for the disclosure requirements and the statutes tasked the California Department of Financial Protection and Innovation (DFPI), which regulates lending in California, to create the regulations which would implement the law. Since 2018, the DFPI has created the regulations for the statutes, but it requested multiple comment periods, and various lenders, law firms, trade associations and other groups submitted comments and requested changes.
By Andrew K. Alper
Vice President and Shareholder at Frandzel Robins Bloom & Csato, L.C.