Unknown Sponsor Bank
New York, NY
New York enacted S.B. 5470 (effective June 2021), a Truth in Lending Act-like disclosure law for commercial financing transactions including business loans and purchases of receivables. The law explicitly applies to fintech platforms operating through bank partner arrangements. The DFS is empowered to enforce the statute with civil penalties of up to $10,000 per willful violation. This represents a significant new compliance obligation for BaaS and bank-fintech lending partnerships operating in or targeting New York borrowers, requiring enhanced disclosure practices for commercial financing products.
Verified from source: New York enacted S.B. 5470, a TILA-like disclosure law for commercial financing that explicitly applies to fintech platforms using bank partner arrangements, with enforcement by the NY Department of Financial Services. The law took effect June 21, 2021.
- Fintech platforms using bank partners for commercial lending must comply with new disclosure requirements in New York
- BaaS providers facilitating commercial financing may need to update compliance frameworks to account for state-level TILA-like obligations
- Civil penalties create enforcement risk for bank-fintech partnerships that fail to provide required disclosures
- PressMayer Brown