Home Commercial OAL may soon decide fate of California’s proposed trade finance rules | Allen Matkins

OAL may soon decide fate of California’s proposed trade finance rules | Allen Matkins

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In September 2018, then-Governor Jerry Brown signed into law SB 1235. SB 1235 added a new division to the Financial Code imposing specific loan disclosure requirements on commercial finance providers. These disclosures include:

  • The total amount of funds provided;
  • The total dollar cost of the financing;
  • The term or estimated term;
  • The method, frequency and amount of payments;
  • A description of prepayment policies; and,
  • Until January 1, 2024, the total cost of financing expressed as an annualized rate.

The bill required Department of Financial Protection and Innovation (then known as the Department of Business Oversight) to adopt regulations governing such disclosures. Cal. Fin. Code § 22804. Commercial finance providers are not required to comply with the new disclosure requirements until the Commissioner’s regulations are passed and come into effect. Cal. Fin. Code § 22804(c). After four rounds of comments, the Department submitted its proposed rules to the Administrative Law Office for evaluation. The OAL is required to conduct a review of the Department’s rulemaking record to ensure that the agency meets the requirements of the California Administrative Procedure Act and OAL regulations. This review is due to end this Friday, June 10. The OAL must either: (i) approve the Department’s regulatory action and file the proposed regulation with the Secretary of State; or (ii) disapprove of the regulatory action. Cal. Government Code § 11349.3.

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