Business Law
Business Law Annual Review 2017
Content
- 2016 Developments in Internet and Privacy Law
- Agribusiness Committee 2016 Year In Review
- Annual Health Law Review for 2016
- Annual Update of Alternative Dispute Resolution Cases
- Banks Face Wave of Website Accessibility Claims Under the Ada
- Bln Editorial Board: Message from the Editor
- Bls Opinions Committee: Review of Current Developments for 2016
- Business Law News Editorial Team
- Business Law News Table of Contents
- Describing the Collateral Subject to a "Blanket" Lien, or How to Knit a Big, Soft, Warm Blanket
- Despite Successes in Fending Off Claims Based on Actual Authority, Franchisors Still Face Difficulties in Defending Claims Based on Ostensible Authority
- Executive Committee: Message from the Chair
- Executive Committee of the Business Law Section 2016-2017
- New Report on Third-Party Closing Opinions for California Limited Liability Companies and Partnerships About To Be Published
- Recent Developments Affecting Insolvency and Commercial Finance in California and the Ninth Circuit
- Selected 2016 Developments in Corporate Law
- Standing Committee Officers of the Business Law Section 2016-2017
- Update on California Finance Lenders Law
Update on California Finance Lenders Law
Mike Slattery and Andrew Noble1
Mike Slattery is Co-Vice Chair of the Financial Institutions Committee. He is Of Counsel to Lamb & Kawakami LLP (downtown Los Angeles) where he represents financial institutions.
Andrew Noble is a financial services attorney at Severson & Werson, P.C. whose practice involves commercial and residential real estate secured lending and retail banking. Mr. Noble currently serves as Chair of the California Bar Association’s Consumer Financial Services Committee. He is admitted to practice in California and Washington state.
The California Finance Lenders Law ("CFLL"), codified at Financial Code section 22000 and following, regulates loans from non-bank lenders. The CFLL requires "finance lenders"2 and "finance brokers"3 to obtain a license from the state Department of Business Oversight ("DBO"). Licensed finance lenders are exempt from California usury law, but the CFLL limits the interest and other charges the lender may impose. The CFLL does not apply to lenders who do business under any state or federal law that regulates banks, trust companies, or savings and loan associations4 or to transactions—automobile finance and retail installment sales contracts—regulated under other California laws.5 There is also an exception for lenders who make five or fewer commercial loans in a twelve month period, provided those loans are "incidental to the lender’s business"6 and for a lender who makes no more than one commercial loan within a twelve month period (regardless of whether the loan is incidental to the lender’s business or not).7 Loans under $2,500 are the most strictly regulated while the CFLL imposes few restrictions on the terms of loans of $5,000 or more.8