ELFA Files Additional Comments to California Commercial Financing Disclosure Regulations

ON AUG. 25, ELFA filed our most recent comments to the California Department of Financial Protection and Innovation in response to the Department’s Aug. 9 modifications to their draft rules implementing SB 1235, the California enhanced financial disclosure law. These comments, our fifth, were made possible through the considerable work and guidance of the ELFA State Legislative and Regulatory Subcommittee and the ELFA CA Workgroup, subgroups of the ELFA Legal Committee.

SB 1235, which was signed into law in 2018, requires consumer-like disclosures to be made for certain commercial financing products. ELFA has led the way throughout the regulatory process and our hard-fought-for exemption for true leases continues to be protected. However, there continue to be outstanding issues ELFA believed strongly needed to be addressed, which are highlighted within our comments. Once again ELFA reminded the Department what the sponsors’ scope and intent for the legislation truly was: See this video of Sen. Steve Glazer, the bill’s sponsor, indicating his desire to exclude the equipment leasing and finance industry from his bill.  

Final Rules and Implementation Date

As the rule promulgation process continues, ELFA expects the Department to finalize the regulations by Jan. 1, 2022, at which time the final rules will be sent to the Office of Administrative Law for final approval. Once OAL approves, ELFA predicts lenders will not be required to comply with the disclosure requirements until at least 180 days after final regulations have been adopted, or about June 2022.  ELFA will alert and apprise the membership of any changes to the proposed rules and any new information regarding the projected implementation date.  

As always, your team at ELFA is working to review and, where needed, to address all legislation filed that impacts your interests. ELFA’s efforts are focused on identifying any and all measures that would wrongly infringe on the operations of ELFA members in the commercial sector, addressing those bills that require our attention and conversely promoting legislation that addresses industry needs. Traditionally ELFA has projected that more than 180,000 state legislative bills will be filed across the 50 states on a yearly basis. In 2021 ELFA projects this number will increase significantly due to the interruptions caused by the pandemic, the closing down of state legislative chambers and the backlog of legislative filings not addressed or permitted due to the shortened legislative session. Of that more than 180,000 state legislative filings, ELFA estimates there will be more than 2,000 bills introduced in 2021 that may impact our members’ interests.

ELFA sends out email updates on state legislative and regulatory activity as it occurs. You can receive this information by sending complete contact information to ELFA Vice President, State Government Relations Scott Riehl at [email protected].