In August 2025, we reported that Texas’s House Bill 700 would take effect on September 1, 2025. The new law requires commercial financing providers to give certain disclosures to potential recipients. At the time, the Texas Office of Consumer Credit Commissioner (“OCCC”) had not decided whether it would adopt a model disclosure form. The OCCC has not adopted a model form since then. See our alert for information on the disclosure requirements.
In September 2025, we reported that California’s Senate Bill 362 had passed both houses of the state legislature. Governor Gavin Newsom signed the bill into law on October 6, 2025. The new law restricts the use of terms such as “interest” and “rate” in connection with the offering of commercial financing. Under the law, the use of those terms is deceptive unless they refer to an annual interest rate or annual percentage rate. See our alert for more details.
The Consumer Financial Protection Bureau finalized an interim rule that further extends compliance deadlines for the Small Business Lending Data Collection Rule, which was promulgated by the CFPB pursuant to Section 1071 of the Dodd-Frank Act (sometimes called the “1071 Rule”). The final rule establishes that the earliest deadline for collecting data (as required by the 1071 Rule) would be July 1, 2026 (for Tier 1/highest volume lenders); January 1, 2027 (for Tier 2/moderate volume lenders); and October 1, 2027 (for Tier 3/smallest volume lenders).
In September, a New York state appeals court unanimously granted summary judgment to a sales-based financing provider in a breach of contract lawsuit, reversing the decision of the trial court. In Apollo Funding Co. v. Dave Reilly Construction, LLC, 2025 N.Y. App. Div. LEXIS 5204 (N.Y. App. Div. September 24, 2025), the court found that the provider had made a prima facie case for breach of contract and that the recipient had not raised a triable issue of fact in response. Notably, the court refused to decide whether the reconciliation provision in the contract was genuine because the recipient had never attempted to use it, implicitly creating a requirement that any future recipient attempt to use a reconciliation provision before they can argue that the provision is illusory. Please see our case summary for more details about the case.