WBK Industry News - State Regulatory Developments

NY DFS Adopts Disclosure Requirements for Small Business Financing

The New York Department of Financial Services (DFS) recently adopted a regulation on disclosure requirements for commercial financing.  The regulation appears as Part 600 of Title 23 of the Official Compilation of Codes, Rules, and Regulations of the State of New York.  The regulation provides guidance on maintaining compliance with the Commercial Finance Disclosure Law (CFDL), which standardizes disclosure requirements for commercial financings that are lower than a certain principal amount.  The regulation takes effect upon publication of the Notice of Adoption in the New York State Register, and the compliance date for the regulation is six months after that publication. 

Among other things, the regulation provides general formatting requirements for the CFDL.  This includes formatting requirements for disclosures on sales-based financing, open-end financing, closed-end financing, lease financing, and general asset-based lending transactions.  Additionally, the regulation also specifies the duties of financers and brokers involved in commercial financing.