California DFPI Issues Final Rules On Commercial Financing UDAAP And Annual APR Reporting

The California Department of Financial Protection and Innovation became the nation's first regulator with authority to police "abusive" acts and practices in commercial financing when it recently adopted final regulations to implement the California Consumer Financial Protection Law's provisions governing commercial financing. The new regulations define "unfair," "deceptive," and "abusive" 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 adopt the definitions of "unfair," "deceptive," and "abusive" from the Dodd-Frank Act, modifying those definitions so that the protections apply to entities rather than individuals. However, the definitions of "unfair" and "deceptive" also provide that anything unfair or deceptive under California's Unfair Competition Law and caselaw interpreting the UCL is also unfair or deceptive (as appropriate) under