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

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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.”