Registration Begins Under Utah Commercial Finance Registration Law | Troutman pepper

As we posted previously here, in March, Utah enacted its Commercial Finance Registration and Disclosure Act (CFRDA), requiring commercial finance providers to register with the Utah Department of Financial Institutions (DFI). The process requires registering with the National Multistate Licensing System and Registry (NMLS), providing certain vendor information, and disclosing information about certain control persons relating to specified criminal convictions. Despite the January 1, 2023 deadline for CFRDA registration, the NMLS has already started accepting applications, and the DFI encourages providers to apply early to avoid backlogs. To help streamline the process, the NMLS has created a requirements checklist found here.

As a reminder, the CFRDA requires a “provider” of trade finance transactions to register with the DFI annually and pay a fee, unless an exemption applies.

  • A “commercial finance transaction” includes a commercial loan, an open-ended commercial credit plan and an accounts receivable purchase transaction.
  • A “provider” is a person who provides more than five commercial finance transactions in Utah in a calendar year. A provider also includes a person who, under an agreement with a deposit-taking institution, offers one or more commercial financing products provided by the deposit-taking institution through an online platform that it administers.

However, several CFRDA exemptions exist for certain entities and types of transactions, including:

  • Deposit-taking institutions and certain regulated subsidiaries and service companies;
  • Money transmitters licensed under Utah law;
  • Commercial mortgages;
  • leases;
  • Silver purchase obligations;
  • Commercial loans and open-ended credit plans of $50,000 or more to motor vehicle dealerships or rental companies;
  • Trade finance transactions offered in connection with the sale of a product that the person manufactures, licenses or distributes; and
  • Trade finance transactions over $1,000,000.

Troutman Pepper routinely assists clients in complying with commercial disclosure laws and will continue to monitor evolving state regulations regarding commercial finance.

Michael J. Birnbaum