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Around the nation, regulators are preparing to implement and enforce new consumer-like disclosure laws for small business commercial finance providers.

New York regulators have yet to issue final regulations implementing the state’s Commercial Finance Disclosure Law (CFDL), which went into effect on January 1, 2022.  As we previously reported, the New York State Department of Financial Services (NYDFS) advised that commercial finance providers’ obligations under the CFDL do not ripen until the NYDFS “issues final implementing regulations and those regulations take effect.” … Continue Reading

The New York Department of Financial Services has issued a letter announcing that it has concluded that the obligation of providers of commercial financing under the Commercial Finance Disclosure Law (CFDL) to provide consumer-like disclosures does not arise “until the Department issues final implementing regulations and those regulations take effect.”

The CFDL was enacted by S 5740-B and requires consumer-like disclosures for “commercial financing” transactions of $2.5 million or less. … Continue Reading

The California Department of Financial Protection and Innovation has published a fourth round of modifications to implement SB 1235, the bill signed into law on September 30, 2018 that requires consumer-like disclosures to be made for certain commercial financing products, including small business loans and merchant cash advances.  The law contains exemptions and carve-outs for, among other things, depository institutions, financings of more than $500,000, closed-end loans with a principal amount of less than $5,000, and transactions secured by real property. … Continue Reading

On October 20, 2021, the New York Department of Financial Services published a notice in the New York State Register announcing that it has issued a proposed regulation to implement S 5470–B, which requires consumer-like disclosures for “commercial financing” transactions of $2.5 million or less.  Comments on the proposal must be submitted by December 19, 2021.… Continue Reading

The California Department of Financial Protection and Innovation (DFPI) has issued second modifications to its proposed regulations to implement SB 1235, the bill signed into law on September 30, 2018 that requires consumer-like disclosures to be made for certain commercial financing products, including small business loans and merchant cash advances.… Continue Reading

The New York City Department of Consumer Affairs (DCA) has proposed new rules for used car dealers that would require dealers to provide the following disclosures to buyers:

  • A financing disclosure that includes the “sale terms,” “financing terms,” and pricing information for add-on products and services.  The financing terms include three APRs: “the Annual Percentage Rate (APR)” (presumably, the contract APR),  the “lowest APR offered to buyer by any finance company for loan with same term and down payment,” and the “APR offered to buyer by selected finance company”
  • A disclosure of the buyer’s right to cancel

The proposal would also require dealers to conspicuously post a “Used Car Consumer Bill of Rights” in any office or area of the dealer’s location where consumers negotiate and execute sales contracts and maintain an “automobile contract cancellation option report” that must be made available to the DCA upon request.… Continue Reading

The FTC recently held a workshop, “Putting Disclosures to the Test,” to explore the question of what should be done to make disclosures effective.  The workshop included reports on numerous studies related to consumer understanding of disclosures, and the efficacy of different methods and timing of consumer disclosures.

Among the panelists at the workshop was Heidi Johnson, a CFPB research analyst. … Continue Reading

On September 15th, the FTC will hold a workshop to examine the testing and evaluation of disclosures that companies make to consumers about advertising claims, privacy practices, and other information.  The FTC’s workshop will explore how to test the effectiveness of these disclosures to ensure consumers notice them, understand them, and can use them in their decision-making. … Continue Reading

The CFPB sent industry trade groups a letter on October 1, 2015 to address the approach of the FFIEC member agencies during the initial months following the implementation of the TILA-RESPA Integrated Disclosure (TRID) rule on October 3, 2015. In the letter, the CFPB noted that it and the other FFIEC member agencies recognized the implementation challenges presented by the TRID rule and the significant efforts made by the industry to implement the rule.… Continue Reading

The CFPB has issued a Spanish version of “Your Home Loan Toolkit” (“Toolkit”), that is designed to be used with disclosures provided under the TILA/RESPA Integrated Disclosure (“TRID”) rule.  The Toolkit will replace the current “Settlement Cost Booklet” (also known as the “Special Information Booklet”) when the TRID rule goes into effect on October 3, 2015. … Continue Reading