CA Issues Regulations that Impose UDAAP Restrictions and Reporting Requirements for Certain Commercial Transactions

The California Department of Financial Protection and Innovation (DFPI) recently issued final regulations that prohibit providers of commercial products and services (covered providers) from engaging in unfair, deceptive, or abusive acts or practices (UDAAP) in connection with commercial financial products and services offered or provided to small businesses, nonprofits, and family farms whose activities are principally directed or managed from California (covered entities).  These regulations, which implement the California Consumer Financial Protection Law (CCFPL), will go into effect on October 1, 2023.

In addition to the UDAAP restrictions, the CCFPL regulations also impose annual reporting requirements for covered providers.  Beginning in 2025, these entities must generally submit reports to the DFPI on the commercial financing transactions with covered entities, including information on: (i) the covered provider’s name, any fictitious business names, entity type, mailing address, phone number, email address, website address, and the designated contact person; (ii) by type of commercial financing, the total number and dollar amount of commercial financing transactions with covered entities; and (iii) by type of commercial financing, the number of commercial financing transactions with covered entities for the following amounts financed: $10,000 or less, over $10,000 but not over $25,000, over $25,000 but not over $50,000, over $50,000 but not over $100,000, over $100,000 but not over $250,000, and over $250,000 but not over $500,000.