New Disclosure Laws Raise Concerns For Nontraditional Lenders

New regulations in the commercial lending space are percolating in New York and across the country with 11 states passing or introducing similar laws through the enactment of commercial finance disclosure law (CFDL) legislation. In articles for Financial Advisor and BAI Banking Strategies, partner Stephen Grable discusses which states have enacted CFDLs, how these apply, the repercussions for non-compliance and the likelihood the trend will continue to expand.

Stephen points out that in California, New York and Utah, their CFDLs apply broadly to various types of commercial financing, including commercial loans, commercial open-end credit plans, accounts receivable purchase transactions and factoring transactions. "New York and California's laws extend even further to cover closed-end financing, sales-based financing-including merchant cash advances-and asset-based lending transactions. While Virginia's law is narrowly tailored only to apply to sales-based