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Recently, the California Department of Financial Protection and Innovation (DFPI) approved the final rule implementing and interpreting certain sections of the California Consumer Financial Protection Law (CCFPL) that prohibit persons from engaging in unfair, deceptive, or abusive acts or practices (UDAAP) related to commercial financial products and services and establishes data collection and reporting requirements.Continue Reading California DFPI Finalizes Small Business UDAAP Rule

On February 27, the California Department of Financial Protection and Innovation (DFPI) issued new guidance with respect to the performance of remote work by mortgage loan originators (MLOs) working for licensees under the California Residential Mortgage Lending Act (California Financial Code Sections 50000 et seq., the “CRMLA”). The CRMLA does not expressly prohibit employees of a licensee from working at a remote location, such as an employee’s home. A licensee may authorize an employee to perform limited functions at a remote location that is not considered a branch office, provided that the location does not have the indicia of a branch office and is not advertised to the public as a business location. However, the guidance noted that a branch manager must continue to supervise employees who are working remotely, and that the DFPI will continue to examine the supervisory activities of a branch manager to ensure that the branch manager is adequately supervising each MLO and employee regardless of whether they are working at a remote location or a branch office.Continue Reading California DFPI Publishes New Guidance on Remote Work by MLOs

On January 26, the California DFPI announced its participation in a $22.5MM multi-state into a settlement with a with a Cayman Islands digital asset firm to resolve a securities enforcement action in connection with the platform’s earn interest product program. A North American Securities Administrators Association working group—composed of the DFPI and state regulators from Washington, Kentucky, New York, Oklahoma, Indiana, Maryland, South Carolina, Vermont, and Wisconsin—collaborated in the investigation into the firm. The group alleged that the platform failed to register as a securities and commodities broker but told investors that it was fully in compliance (we discussed similar actions in a previous blog post here). The DFPI’s previous desist-and-refrain order concluded that the earn interest accounts, which enables retail investors to earn interest upwards of 36% APR on crypto assets, constituted the unqualified sale of securities in the form of investment contracts in violation of California law.Continue Reading Recent Crypto Settlements Signal State and Federal Enforcement Trends

On August 30, the Commissioner of the California DFPI issued a notice of rulemaking proposing new regulations and amendments to current regulations implementing the state’s student loan servicing laws. The proposed regulations aim to implement the provisions of the Student Loan Servicing Act and the Student Loans: Borrower Rights law by:
Continue Reading California Regulator Proposes Changes to Student Loan Servicing Laws

Two weeks after the DFPI set a Dec. 9 effective date for its long-threatened commercial financing disclosure requirement (we discussed these regulations in a previous bog, here), the DFPI issued proposed commercial UDAAP and annual reporting regulations likely impacting many of the same companies. Specifically, the proposed regulations would apply to providers of commercial financing or other financial products and services to small businesses, nonprofits, and family farms, and would (i) expand the DFPI’s UDAAP authority, and (2) impose annual reporting requirements on covered providers (we briefly discussed these proposed regulations in a previous blog post here).
Continue Reading Proposed California Commercial UDAAP and Annual Reporting Regs to be Promulgated Under California Consumer Financial Protection Law

On June 24, the California Department of Financial Protection and Innovation (DFPI) issued proposed regulations implementing certain provisions of the California Consumer Financial Protection Law (CFPL) related to commercial financial products and services. Written comments on the proposed regulations are due by August 8.
Continue Reading DFPI Issues Proposed Rules for Commercial Financing

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. The regulations will become effective on December 9, 2022, and the final regulatory text can be found here.
Continue Reading California Approves Commercial Financing Disclosure Regulations