On Aug. 2, 2023, the Office of Administrative Law approved the DFPI’s proposed adoption of regulations under the California Consumer Financial Protection Law (CCFPL) concerning the offering and provision of commercial financing and other financial products and services to small businesses, nonprofits, and family farms (PRO 02-21).
The DFPI rules make California the first in the nation to police abusive acts and practices in commercial financing. The new regulations define unfair, deceptive, and abusive practices (UDAAP) in relation to commercial financing and require unlicensed commercial financing providers to annually report the cost of their financing products to the DFPI.
The regulations become effective on October 1, 2023. The first annual report required to be filed under these regulations will cover activity during 2024 and will be due no later than March 15, 2025. The final text and related documents can be found on the DFPI’s website under “Final Regulations.”