California Advocacy Alert

Last month, SFNet alerted members to CA AB2559, which expands the DBO’s enforcement powers by allowing the DBO to seek ancillary relief in the form of refunds, restitution, disgorgement or damages paid by the lender subject to the California Financing Law (“CFL”) which is found to be violating the CFL. Such ancillary relief is in addition to any fee or citation levied by the DBO and collected for the benefit of the State and is to be paid directly to the aggrieved borrower. 

SFNet has concerns regarding this bill due to the potential it creates for the active plaintiff’s bar in California, seeing it as creating a lucrative opportunity to get involved with representing the DBO to seek recovery from lenders operating in California. This presents material risk relative to our member companies, who, despite acting in good faith, are found to be in violation of the CFL with regard to disclosures or other matters. SFNet CEO, Rich Gumbrecht, has submitted the attached letter to Assemblywoman Rebecca Bauer-Kahan and will be meeting with the Assemblywoman and her staff next week. If you have any questions or comments, please let us know.