Utah
From January 1, 2023 onwards, a mandate applies to all individuals involved in commercial financing transactions with a resident of Utah or a provider in Utah. To comply with this regulation, they are required to complete registration with the Utah Department of Financial Institutions (DFI). The transactions subject to this requirement include deals that fall under the definition of a commercial loan, purchases of accounts receivable, factoring, and merchant cash advances, but only for amounts up to $1 million.
Furthermore, financing providers engaged in such transactions must also be duly registered with the Nationwide Multistate Licensing System and Registry (NMLS).
In adherence to Utah’s regulations, lenders have a set of specific obligations to fulfill when providing financing. They are required to disclose the loan’s annual percentage rate (APR) along with any associated fees or charges. A comprehensive explanation of the repayment terms is also mandatory, encompassing details such as the total amount due, the payment schedule, the total funds disbursed, and any penalties applicable for late or missed payments.
Utah goes beyond these general requirements and has additional regulations in place for brokers. Brokers must disclose the exact amounts of their commissions and clarify the payment method used. Furthermore, they are obligated to outline hypothetical scenarios that could lead to variations in the financial outcomes.
By ensuring that borrowers have transparent and accurate information about their financing terms, Utah’s regulations play a crucial role in safeguarding against financial harm and encouraging responsible borrowing practices.
Utah Disclosure FAQ
If a Utah Merchant accepts a contract, the Broker must ensure the Merchant signs and dates both the contract and disclosure.
Once contract and disclosure is signed and dated, it must be sent to your lender pre-funding.
