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Will Your Industry Be On Deck For Registration With The California Department Of Financial Protection & Innovation?

The California Consumer Financial Protection Law (CCFPL) authorizes the Department of Financial Protection & Innovation (DFPI) “regarding registration requirements applicable to a covered person engaged in the business of...more

As Predicted, Digital Financial Asset Law Is Delayed

Exactly one year ago today, I wrote that Governor Newsom had signed a bill, AB 39, that will prohibit a person from engaging in digital financial asset business activity without a license from Department of Financial...more

What Exactly Does The Deputy Commissioner For New Covered Persons Oversee?

Since I served as Commissioner of Corporations in the 1990s, the Department of Corporations has consolidated with the Department of Financial Institutions and changed its name twice.  It is now known by the unwieldy name of...more

A Critical Prepositional Phrase Is Missing From This California Statute

It is a peculiar hubris of California's legislators that they often presume to extend the application of the state's laws beyond its legal borders.  Corporations Code Section 2115, for example, presumes to apply multiple...more

California Bill Would Deem Some Lenders As Licensed

California generally requires that persons engaged in the business of making loans be licensed.  If not licensed under some other statute (such as the banking, credit union or residential mortgage lending laws), a lender will...more

California Bill Would Establish Registration Program With Respect To Commercial Financing Or Commercial Financing Brokerage...

Recently, I wrote about the California Office of Administrative Law's rejection of regulations proposed by the Department of Financial Protection & Innovation.  These proposed regulations were intended to "implement,...more

DFPI Is Victim Of Identity Theft

There is certainly no lack of persons actively violating the seventh or eighth commandment (depending upon who is counting).  Last week, the California Department of Financial Protection & Innovation announced that it has...more

Why Is The DFPI Requesting Funding To Implement Venture Capital Funding Reporting Mandate?

Last year, the California legislature enacted a bill, SB 54 (Skinner), that requires a "a venture capital" company to report annually to the Civil Rights Department on its funding determinations related to companies primarily...more

Governor Seeks $7.9 Million To Implement Venture Capital Company Reporting Law That He Branded As "Problematic"

Article 14, Section 12 of the California Constitution requires the Governor to submit a budget to the Legislature by January 10 of each year.  The Constitution further required that the budget be accompanied by a budget bill,...more

OAL Rejects DFPI Proposed Regulations

In March 2023, the California Department of Financial Protection & Innovation proposed to adopt numerous regulations to "implement, interpret, and make specific registration requirements for covered persons under the...more

Bank Runs And Social Media

In this post from 14 years ago, I speculated as to whether California Financial Code Section 1327 was constitutional.  Two years later, the California Court of Appeal declared the statute unconstitutional.   Summit Bank v....more

DFPI Issues 2023 CCFPL Report

Last week the California Department of Financial Protection & Innovation issued a report of its activities under the California Consumer Financial Protection Law.   The California legislature enacted the CCFPL in 2020 for the...more

Judge Rules That A Front For Mexican Cartel Had The Capacity To Protect Its Own Interests

California Corporations Code Section 25118(b) provides an exemption from the state's usury limitations for loans.  The exemption is subject to several conditions.  One condition is the existence of either a preexisting...more

California Bill Would Require Licensing Of Commercial Financing Providers

Last week, Senator Steven M. Glazer introduced a bill, SB 1482,  that would require licensing of "commercial financing providers" and "commercial financing brokers" with the Department of Financial Protection & Innovation...more

It's Lupercalia! CFL Annual Reports Are Due In 30 Days

Each year, licensees under the California Financing Law (Cal. Fin. Code § 22000 et seq.) must file an annual report with the Department of Financial Protection & Innovation.  The report is due on the Ides of March (the Ides...more

Is Someone Who Makes No Loans, A Lender?

The California Finance Lenders Law prohibits any "person" from engaging in the business of a "finance lender" without a license, unless otherwise exempt.  Cal. Fin. Code § 22100(a).   The CFL defines a "finance lender" as...more

DFPI Invites Comments On DFAL Rulemaking

In October, I reported on the Governor's signing of AB 39 which creates the Digital Financial Assets Law.   On or after July 1, 2025, the DFAL will prohibit a person from engaging in digital financial asset business activity...more

Court Rules That Debate And Litigation Do Not Necessarily A Controversy Make

In June of 2022, I reported on the adoption of commercial financial disclosure rules by the California Department of Financial Protection & Innovation.  These rules were adopted pursuant legislation, SB 1235, that was enacted...more

Court Ruling Deals Blow To DFPI's "True Lender" Theory

While the California Financing Law defines "finance lender", it does so in a very open-ended and nonspecific manner.  Cal. Fin. Code § 22009 ("'Finance lender' includes any person who is engaged in the business of making...more

The Nebulous Meaning Of "Small Business" In New Ban On Commercial Loan Fees

Beginning in January, "covered entities" will be prohibited from charging specified fees in connection with a commercial financing transaction with a "small business" or "small business" owner.  Cal. Stat. ch. 881 (SB 666). ...more

Unlicensed Lender Parries Unfair Competition Claim

Yesterday's post concerned discussed Lagrisola v. North American Financial Corp.,  2023 WL 7273708 (Nov. 3, 2023), in which the Court of Appeal held that a borrower had failed to plead a cause of action against an unlicensed...more

Court Of Appeal Finds No Private Right Of Action Against Unlicensed Lender

Section 22100 of the California Financial Code prohibits persons from engaging in the business of a finance lender or broker without obtaining a license from the California Commissioner of Financial Protection & Innovation. ...more

After Vetoing Earlier Bill, Governor Signs Digital Financial Asset Bill

A year ago, Governor Newsom vetoed a bill, AB 2269, which would have established a Digital Financial Assets Law.  At the time, the Governor claimed that it was "premature to lock a licensing structure in statute".   What a...more

Whom Should The Law Protect - The Borrower/Issuer Or Lender/Purchaser?

The many California laws are intended to protect borrowers.  The California Financing Law, for example, provides that it is to be liberally construed to, among other things, "protect borrowers against unfair practices by some...more

Someone's Knockin' At The Door, But It May Not Be The DFPI

Last week, the California Department of Financial Protection & Innovation issued a warning about yet another fraudster's attempt to separate investors from their money...more

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