California Commercial Lending Compliance
Commercial Financing Disclosure Law (CFDL)
Quick Summary
California's CFDL requires detailed written disclosures for commercial loans under $500K. Brokers face penalties up to $10,000 per violation. Disclosures must be provided before contract execution using a specific format.
At a Glance
Disclosure Law
Yes
Commercial Financing Disclosure Law (CFDL)
Effective Date
January 1, 2019
Loan Threshold
Under $500,000
Applies to loans below this amount
Maximum Penalty
$10,000 per violation (no cap)
Per violation, no cap
Key Requirements
What You Must Disclose:
Annual Percentage Rate (APR) calculated using specific CFDL method
Total finance charge disclosed in dollars
Amount financed with itemization of fees
Total of payments over term
Payment schedule with dates and amounts
Prepayment penalties (if any) clearly stated
Disclosures must be provided BEFORE contract execution
Minimum 12-point font required
Specific disclosure format mandated by statute
Must be in same language as sales presentation
Common Mistakes Brokers Make
Sending loan offers without required disclosures
Using incorrect APR calculation method
Providing verbal estimates only without written disclosure
Missing prepayment penalty details
Disclosing after customer shows interest but before signing
Using font size smaller than 12 points
Omitting total finance charge in dollar amount
How SalesLeadAgent Helps
- Email templates with California-compliant language pre-loaded
- Automatic state detection from lead data
- Disclosure reminders at key stages of your sales funnel
- Track which disclosures were sent to which leads
Who Is Exempt?
The following entities and transactions are typically exempt from Commercial Financing Disclosure Law (CFDL):
- Banks and credit unions
- Farm Credit System institutions
- Finance lenders licensed under California Finance Lenders Law
- Loans over $500,000
- Businesses with 250 or more employees
- Purchase money loans for real property
Note: Even if you're exempt from state disclosure laws, federal regulations may still apply. Consult with legal counsel to understand all applicable requirements.
Penalties & Enforcement
Financial Penalties
First Violation
$5,000
Subsequent Violations
$10,000 per violation (no cap)
There is typically no cap on total penalties. Multiple violations can result in hundreds of thousands of dollars in fines.
Enforcement
Enforced By
California Department of Financial Protection and Innovation (DFPI)
Additional Consequences:
- •Private right of action (customers can sue)
- •Public disclosure of violations
- •Reputational damage with lenders and clients
- •Potential loss of licensing or operating privileges
Ready to Streamline California Compliance?
SalesLeadAgent automatically handles compliance requirements for California and all other states, so you can focus on closing deals instead of worrying about regulations.
Important Legal Disclaimer
This page provides general information about California commercial lending regulations and is not legal advice. Laws change frequently and interpretation varies by circumstance. Users should consult with qualified legal counsel before relying on this information for compliance purposes.
SalesLeadAgent and its affiliates disclaim all liability for actions taken or not taken based on information provided here. While we strive to keep this information current, we make no warranties about the completeness, reliability, or accuracy of this information.
Last updated: January 12, 2026
Sources: California state statutes, California Department of Financial Protection and Innovation (DFPI)