News & Analysis as of

California Financial Services Industry Lenders

Troutman Pepper Locke

California Home Improvement and Solar Financing Bill Passed by Senate and Moving Through Assembly

Troutman Pepper Locke on

An initiative designed to add significant regulatory obligations to the home improvement and solar financing industries is progressing through the California legislature. Senate Bill 784 (SB 784) passed the California Senate...more

Alston & Bird

Consumer Finance State Roundup - March 2025

Alston & Bird on

The latest edition of the Consumer Finance State Roundup highlights recently enacted measures of potential interest from two states: California: Effective January 1, California Assembly Bill 3108 addresses mortgage fraud. ...more

Sheppard Mullin Richter & Hampton LLP

Class Action Certified Against Fintech Lender for Home Improvement Loans

In an order issued in January and made public on February 24, a judge in the United States District Court for the Northern District of California granted class certification to consumers alleging a fintech lender’s loan...more

Orrick, Herrington & Sutcliffe LLP

California DFPI revokes cryptocurrency lender’s license after suspension

On October 28, the California DFPI revoked a cryptocurrency lender’s California Licensing Law (CFL) license based on alleged violations, including improper practices related to digital asset collateral loans, including...more

Mayer Brown

How California’s Climate Disclosure Law Impacts Lenders in Subscription Credit Facilities

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EXECUTIVE SUMMARY - As part of its Climate Accountability Package, California passed a law last year that creates disclosure requirements related to greenhouse gas (“GHG”) emissions for thousands of U.S. companies,...more

Allen Matkins

California Bill Would Deem Some Lenders As Licensed

Allen Matkins on

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

Allen Matkins

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

Allen Matkins on

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

Troutman Pepper Locke

Calif. Banking Brief: The Notable Compliance Updates in Q3

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The California Department of Financial Protection and Innovation, or DFPI, continued to have significant influence over legislative and regulatory developments in the third quarter of 2023. Originally published in Law360 -...more

Allen Matkins

Is Someone Who Makes No Loans, A Lender?

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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

Allen Matkins

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

Allen Matkins on

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

Allen Matkins

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

Allen Matkins on

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

Allen Matkins

Unlicensed Lender Parries Unfair Competition Claim

Allen Matkins on

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

King & Spalding

Ninth Circuit Addresses Issue of First Impression Concerning the Usury Defense Under California Law

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On May 25, 2023, the U.S. Court of Appeals for the Ninth Circuit, in a two-to-one split decision, held that an exemption to California’s usury laws for certain “aggregate” loan amounts applies only to indebtedness of a single...more

Katten Muchin Rosenman LLP

California Court of Appeal Ruling Limits Application of Default Interest

The California Court of Appeal recently ruled that California law treats default interest measured against the unpaid principal balance of a loan as an unenforceable penalty. In Honchariw v. FJM Private Mortgage Fund, LLC...more

Allen Matkins

The DFPI's Subterranean "True Lender" Doctrine

Allen Matkins on

Some readers may recall that two years ago the Office of the Comptroller of the Currency adopted a "true lender" rule.  That rule  The rule specified that a bank makes a loan and is the true lender if, as of the date of...more

Allen Matkins

Finance Lenders: It's Time To Pay Your Annual Assessment

Allen Matkins on

The California Financing Law requires each licensed lender, broker, and program administrator licensee to pay its pro rata share of all costs and expenses of the administration of the law, as estimated by the Commissioner,...more

Allen Matkins

Court: OTC Company Has The Capacity To Protect Its Own Interests

Allen Matkins on

Notably, California has a constitutional limitation on interest rates (Cal. Const. Art. XV, Section 1).   Section 25118 exempts certain evidences of indebtedness that meet specified conditions.  One of these conditions is...more

Sheppard Mullin Richter & Hampton LLP

California Approves Commercial Financing Disclosure Regulations

On June 9, the California Office of Administrative Law (OAL) approved the Department of Financial Protection and Innovation’s (DFPI) proposed commercial financing disclosure regulations issued pursuant to SB 1235...more

Allen Matkins

California Bill Would Ban This Unusual "Purpose Credit"

Allen Matkins on

Regulation U, 12 CFR § 221.1 – 221.125, imposes certain requirements for lenders, other than securities brokers and dealers, who extend credit secured by margin stock.  Regulation U defines "purpose credit" as "any credit for...more

Allen Matkins

California Bids Adieu To Its Tiniest De Minimis CFL Exemption

Allen Matkins on

The California Financing Law prohibits any person from engaging in the business of a finance lender without first obtaining a license from the Commissioner of Financial Protection & Innovation.  Cal. Fin. Code § 22100(a). ...more

Allen Matkins

Why CFL Licensed Lenders Must Submit New License Applications By Year End

Allen Matkins on

Several thousand lenders and brokers are currently licensed by the Department of Financial Protection & Innovation under the California Financing Law.   The CFL generally requires that persons engaged in the business of...more

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