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  1. #1

    Cool NY Disclosure Law pushed back by 6 months!

    My lawyer just sent me the following:

    FYI:

    DFS posted revised regulations on its website this morning, including a section that pushes back implementation of the disclosures:

    Section 600.23 Effective Date and Compliance Date.

    (a) This Part takes effect upon publication of the Notice of Adoption in the State Register.

    (b) The compliance date for this Part is six months after the date of publication of the Notice of Adoption in the State Register.

    https://www.dfs.ny.gov/system/files/...ext_202110.pdf


    Good news for the industry. For now...

  2. #2
    Senior Member Reputation points: 18841
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    This is a relief and hopefully it gets pushed back even further

  3. #3
    What does this mean for lenders when this goes into effect? 51 pages long cant read the whole thing. Someone please elaborate

  4. #4
    Quote Originally Posted by albertmalah View Post
    What does this mean for lenders when this goes into effect? 51 pages long cant read the whole thing. Someone please elaborate
    Basically, funders will need to have their contracts re-drafted to satisfy all the nonsense in the new disclosure bills. The bill even requires Times New Roman in specific font size in specific sections. Unreal.

  5. #5
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    it's about protecting the borrower. Some would say government overreach...I remember the crash of 2008. And the change from unregulated industry to regulated. That created NMLS and compliance review.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
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    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
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  6. #6
    I’ve analyzed the NY Financial Disclosure Law, including the proposed regulations, to determine what if any impact it has on brokers. From what I can tell, the law applies almost exclusively to providers of commercial funding transactions (e.g., lenders, funders) and doesn’t regulate brokers at all, with the exception of the requirements excerpted below.

    It appears that all a broker needs to do in order to be in compliance with the law is to forward the disclosure from the funder to the merchant, and then send confirmation of transmission to the funder. The onus is on the funder to prepare an accurate/compliant disclosure and provide it to the broker. And the law explicitly exempts brokers from any liability in the event that the disclosure, as prepared by the funder, isn’t accurate or otherwise doesn’t comply with the law.

    Furthermore, the maximum penalty for anybody who violates the law is $2,000 per violation (or $10,000 if willful). Obviously, nobody wants to be subject to fines, but the point is there’s no criminal liability in the statute. And it’s really difficult for a broker to violate the statute unless they fail to do two simple things – forward the disclose to the merchant and send confirmation to the funder before presenting an offer.

    Here is the link to the regulations - https://www.dfs.ny.gov/industry_guid...00_text_202110

    Section 600.21 Duties of financers and brokers.

    (a) A financer shall:

    (1) provide a copy of compliant disclosures to a broker, prior to the broker extending a specific offer;

    (b) A broker shall not provide a recipient with a specific offer of commercial financing until the broker transmits the disclosures required by subdivision (a)(1) of this section, unaltered, to the recipient. After a broker transmits disclosures to the recipient, the broker shall provide evidence of transmission of the disclosures to the financer, including the time of transmission.

    (c) This section shall not be construed to:

    (1) require a broker to evaluate the accuracy of the disclosures provided by the financer;
    (2) create any liability for a broker if the disclosures that the financer provides do not comply with this Part; or
    (3) limit any liability that may arise when a broker makes representations concerning the commercial financing.

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