Utah legislators have enacted a new law for commercial lenders, who are now required to file loan details with the state. Commercial litigation funders are included in the Utah legislation, but only when lending amounts lower than $1M. New York and California have issued similar legislative guidelines in recent months as state governments look to coordinate safeguards for the lower tier of the marketplace.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Utah legislators have enacted a new law for commercial lenders, who are now required to file loan details with the state. Commercial litigation funders are included in the Utah legislation, but only when lending amounts lower than $1M. New York and California have issued similar legislative guidelines in recent months as state governments look to coordinate safeguards for the lower tier of the marketplace.
Mondaq.com published insights from Manatt, Phelps & Phillips LLP on Utah’s commercial lending guidelines. Below, we have generated a list of requirements lenders will be forced to disclose:
- The total amount of funds provided.
- The total amount of funds disbursed to the borrower, if less than the amount provided.
- The total amount to be paid to the commercial lender.
- The total dollar cost of the transaction.
- The manner, frequency and amount of each payment or, if the amount of each payment may vary, “the manner, frequency, and estimated amount of the initial payment.”
- A statement of whether there are any costs or discounts associated with prepayment of the commercial loan, including a reference to the section of the agreement that creates such cost or discount.
- If any portion of the borrower’s loan was paid to a broker rather than to the borrower, the amount paid to the broker must be disclosed.
- A description of the methodology that will be used to calculate any variable payment amount and the circumstances that may cause variations in the payment amount.
