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CALIFORNIA CORPORATE & SECURITIES LAW

Commissioner Finds Funding Is Not A Sine Qua Non For Lender Status

The California Department of Business Oversight administers and enforces the California Finance Lenders Law, Cal. Fin. Code § 22000 et seq.  The CFLL prohibits any person from engaging in the business of a “finance lender” without a license, unless otherwise exempt.  Cal. Fin. Code § 22100(a).  The CFLL provides the following definition of “finance lender”:…

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Bill Would Authorize Payments For Commercial Loan Referrals

California State Senator Marty Block has introduced a bill, SB 197, that would authorize a licensed finance lender to compensate an unlicensed person or company in connection with the referral of one or more prospective borrowers to the licensee for a commercial loan.  Compensation would be authorized only if several conditions are met.  For example, the referral must lead…

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Courts Tackle Meaning of “May” Under the Finance Lenders Law

Section 22340(a) of the California Financial Code provides that a licensee “may sell promissory notes . . . to institutional investors.”  Does this mean that a licensee may only sell promissory notes to institutional investors or that selling promissory notes to institutional investors is something that licensees are permitted to do?  U.S. Magistrate Judge Nathanael M. Cousins…

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