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CALIFORNIA CORPORATE & SECURITIES LAW

Will California Regulate Lead Generators?

These are the new leads. These are the Glengarry leads. And to you they’re gold, and you don’t get them. Why? Because to give them to you is just throwing them away. They’re for closers. I’d wish you good luck but you wouldn’t know what to do with it if you got it.

Blake (played by Alec Baldwin) in Glengarry Glen Ross (1992).

In February, I wrote about SB 297 (Dodd) which as introduced would have required the licensing of finders under the California Finance Lenders Law, Cal. Fin. Code § 22000 et seq.  In April, Senator Dodd amended SB 297 to, among other things, jettison the term “finder” in favor of “lead generator”.  If enacted, this bill would constitute a significant expansion of the Finance Lenders Law and the responsibilities of the Commissioner of Business Oversight.  According to the Senate Banking and Financial Institutions analysis of a prior version of the bill, “no other state law in the country requires lead generators to be licensed, most lead generation activities are performed by unlicensed entities.”  According to this same analysis, the bill is supported by lending organizations and opposed by consumer organizations.

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