New York Finalizes Commercial Financing Disclosure Regulations

On February 1, 2023, the New York State Department of Financial Services (DFS) adopted final regulations relating to New York's Commercial Finance Disclosure Law (CFDL), which requires providers of commercial financing, including term loans, revolving lines of credit, leases, merchant/business cash advances, buy-now-pay-later (BNPL) products, factoring, and general asset-based transactions, to provide recipients with consumer-style cost of credit disclosures. The final regulations became effective immediately and provide for a six-month grace period to comply.

Background

The CFDL requires providers of commercial financing to provide consumer-style cost of credit disclosures to recipients, and it authorizes the DFS to promulgate implementing regulations. Our prior alert discusses the CFDL's applicability and its exemptions. On October 20, 2021, the DFS issued a notice of proposed rulemaking under the CFDL, and following multiple rounds of public comment adopted