New York Department of Financial Services Changes Effective Date for New Trade Finance Disclosure Laws – Finance and Banking


United States: New York Department of Financial Services Amends Effective Date of New Commercial Finance Disclosure Laws

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The New York Department of Financial Services (DFS or Department) used its authority to extend a statutory effective date to January 1, 2022.

As we previously reported in our September 30 Client Alert, the DFS released draft regulations on September 21, 2021, which will implement legal requirements for commercial finance disclosures for certain types of “small” (until ‘to $ 2.5 million) of trade finance transactions (the NY DFS proposal or the proposal). The proposal implements New York’s Commercial Finance Disclosure Law (CFDL), which was fully enacted in early 2021.

The DSV’s proposal was open for a 60-day comment period that ended on December 20, 2020. However, the proposal stated that the final rules, which are necessary to determine the ministry’s interpretation of a wide range of requirements, would be published “in order to facilitate the implementation of the CFDL in time for January 1, 2022 [statutory] This would have meant that the Ministry would have published (and demanded compliance with) new rules within 11 days between the close of the date comments were accepted and the date those rules came into force.

On December 31, 2021, Katten received a notice from the DFS which was provided to those who had commented stating that the DFS had “a conclusion that CDFL obligations do not arise until the ministry publishes the regulations to” final application and that these regulations come into force ”. This is an important development because it ensures that the lenders affected by the Proposal will not have to modify their software and transaction origination platforms to comply with the explicit statutory provisions of the CFDL for commercial financing operations. from January 1, 2022, then again when they are final. rules are promulgated. This approach is consistent with the approach taken by the California Department of Financial Protection and Innovation under its similar trade finance disclosure rules which are still in the form proposed.

Also see:

“The effective date of Section 8 of the New York Financial Services Act,” New York Department of Financial Services, December 31, 2021

“New York Department of Financial Services Publishes Proposed Rules Implementing Trade Finance Disclosure Laws,” Katten, September 30, 2021

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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