California enacts new commercial financing regulations

California has enacted Assembly Bill 2116, expanding the regulation of commercial financing. The new framework covers activities such as accounts-receivable purchases, factoring, asset-based lending, commercial loans, commercial open-end credit plans, and lease financing.

The regulations are set to become operative on January 1, 2028. By July 1, 2028, most covered commercial financing providers and brokers will be required to obtain a license from the Commissioner of Financial Protection and Innovation to operate in the state.

Separately, the Federal Deposit Insurance Corporation (FDIC) has proposed a rule to establish interstate parity for state-chartered banks. The proposal aims to extend parity between state-chartered and national banks when an out-of-state state bank provides services in a host state, regardless of whether the bank maintains a physical branch there.