Commercial Finance Transactions: New Disclosure Requirements in New York and California

Required Documentation and Timing of Disclosures; Applicable Lenders and Types of Financing

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Thursday, March 10, 2022

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, February 11, 2022

or call 1-800-926-7926

This CLE webinar will examine recently enacted New York and California lending statutes that are the first of their kind to require various financial disclosures to borrowers in certain types of commercial transactions. The panel discussion will include how to document these disclosures at the application and closing stage and the applicability of the new statutes to lenders nationwide.

Description

New York's Commercial Finance Disclosure Law, S.B. 5470, enacted at the end of 2020 and modified in early 2021 to cover commercial finance transactions of up to $2.5 million, and California's commercial financing disclosure law, SB 1235, enacted in 2019, are meant to enable commercial borrowers to better understand and compare the cost of credit in the same way that Truth-in-Lending laws do for consumers.

Proposed N.Y. regulations (similar to those under consideration in California), effective on Jan. 1, 2022, provide a prescribed format for lenders to provide upfront disclosures to commercial borrowers. The statute and regs apply to most types of credit, including sales-based financing, closed- and open-end financing, factoring transactions financing, lease financing, and general asset-based financing.

Penalties for noncompliance are significant--up to $10,000 for each violation--and the N.Y. DFS Superintendent is permitted to impose additional relief, including injunction of nonconforming practices. State and federally chartered banks are exempt, but FinTech lenders and other financial institutions must develop policies, procedures, and documentation that comply with the disclosure requirements.

Listen as our authoritative panel discusses the nuances of the New York and California statutes and their potential applicability to lenders throughout the U.S.

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Outline

  1. New regulation of commercial lending in N.Y. and Calif.: why now?
  2. New York's Commercial Finance Disclosure Law (S.B. 5470)
    1. Applicable loans
    2. Applicable institutions: exemptions
    3. The geographic reach of statute beyond N.Y.
    4. Penalties for noncompliance
    5. Effect on loan documentation
  3. California's commercial financing disclosure law (SB 1235): similarities and differences
  4. N.Y. proposed regulations
    1. Prescribed format for disclosure
    2. Comparison to California regs
  5. Timeline for compliance/enforcement

Benefits

The panel will review these and other notable issues:

  • What are the policy considerations behind enacting the new finance disclosure laws in New York and California?
  • Which lenders are exempt from the New York and California statutes; do the statutes apply to lenders located elsewhere?
  • What are the particular disclosures required under proposed rules in each state, and when must they be made to the borrower?
  • How should lenders revise their loan documents and closing procedures to comply?

Faculty

Pearson, Scott
Scott M. Pearson

Partner
Manatt Phelps & Phillips

Mr. Pearson focuses his practice on the defense of regulatory enforcement actions and consumer class actions, other...  |  Read More

Additional faculty
to be announced.
Attend on March 10

Early Discount (through 02/11/22)

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Early Discount (through 02/11/22)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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