New York Commercial Financing Disclosure Requirements Take Effect Soon

On September 21, 2021, the New York Department of Financial Services (NYDFS) released its pre-proposed regulations to implement the commercial financing disclosure requirements in S5470-B and S898. The ten-day outreach comment period closed on October 1, 2021, but as of today, the proposed regulations have not yet been published in the New York State Register. Once published, there will be a 60-day comment period and then NYDFS will review all comments and issue a final regulation. Absent executive or agency action delaying the effective date, commercial finance companies will need to comply with the new law starting on January 1, 2022.

Similar to California's SB 1235, the New York law will require Truth in Lending Act–like disclosure requirements not only for loans but also for other types of financing, such as factoring and merchant cash advances (MCAs).