California Finance Lenders Law (CFLL)
Who is licensed
The California Finance Lenders Law (Financial Code Division 9, beginning at Section 22000) is administered by the DFPI and licenses two distinct roles: finance lenders, who make loans, and finance brokers, who arrange them for a fee. A company may hold both, but each activity requires its own authority. Licensees post a bond, file annual reports, maintain records subject to examination, and advertise in compliance with the statute.
What it covers - and what it does not
Originally consumer installment lending, the CFLL now reaches consumer and commercial loans generally. Critically, a CFLL license does not authorize residential mortgage lending; a finance lender that wants to make loans secured by one-to-four unit residential property must also obtain a CRMLA license. This is the single most tested boundary in the domain.
Rates and the small-loan program
A licensed finance lender is exempt from California's constitutional usury limit, but the statute imposes its own caps on smaller consumer loans. For unsecured consumer loans in the range of roughly $2,500 to $10,000, the statutory pilot program permits a maximum annual percentage rate of 36% plus a limited, disclosed origination fee, with required amortization and restrictions on prepayment penalties and multiple loans to one borrower.
Broker duties and traps
Brokers must disclose their compensation in writing and cannot secretly collect from both borrower and lender. Questions often disguise a mortgage loan as a "consumer loan" to see whether you apply CFLL caps, or describe a broker who is unlicensed because the lender is licensed - both roles need licensure.
Rule of thumb: CFLL equals personal property and general consumer credit; if the collateral is a house with four or fewer units, think CRMLA.