California Finalizes UDAAP Rule for Small Business Financing
By Susan Seaman, Chris Friedman, and Daniel Wilkinson, Husch Blackwell LLP
On August 2, 2023, the California Department of Financial Protection and Innovation (DFPI) issued a final rule that prohibits covered providers from engaging in unfair, deceptive, or abusive acts or practices (UDAAP) in connection with offering or providing commercial financing or other financial products or services to small businesses, nonprofits, or family farms. The final rule adopts the general standards for unfairness, deception, and abusiveness under federal law. With respect to the unfairness and deception standards, the rule also states that an act or practice is unfair or deceptive in accordance with the California Unfair Competition Law and California case law under that law.