CFPB Issues Determination that State Disclosure Laws on Business Lending are Consistent with the Truth in Lending Act

  • Source: consumerfinance.gov

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Highlights:

On March 28, 2023 the Consumer Financial Protection Bureau (CFPB) announced that it had arrived at a determination as to whether state disclosure laws in certain states were preempted by the federal Truth in Lending Act (“TILA”). The determination arose from a 2022 request regarding New York’s commercial financing disclosure law. Key parts of CFPB’s announcement includes:

  • 2022 request:
    • Was New York’s commercial financial disclosure law preempted by the federal TILA?
    • After consideration, CFPB determined that the New York law was not preempted by TILA because it regulated commercial financing transactions rather than consumer-purpose transactions
  • CFPB request:
    • The CFPB requested comment on whether it should finalize the New York determination as well as similar laws in California, Utah, and Virginia
  • Conclusion
    • TILA protections extend to consumers;
    • Disclosure laws in NY, CA, UT, and VA extend to businesses; and
    • “The CFPB’s decision affirms that the four states’ commercial financing disclosure laws do not conflict with the Truth in Lending Act.”

Author

Cyndi Ramos

Cyndi Ramos is an Engagement Director at Treliant with 30 years of financial services experience.  Her areas of expertise include commercial and residential mortgage operations, data accuracy, regulatory compliance, and banking with an emphasis on mortgage servicing.  Her specialties include Flood Disaster Compliance Act (FDCA) and data integrity and accuracy.