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From Ken Greene, Esq., California attorney " I learned that lesson the hard way! The most revealing test as to whether equipment finance brokers in California must be licensed under our Finance Lender's Act arises when you attempt to defend a non-licensed broker before the Department of Corporations, which has initial jurisdiction over these matters. " "I had a case like that last year. The Department had issued a Cease and Desist Order effectively barring my client from brokering leases until it obtained a license. We sought to fight the matter, and were blessed with an administrative hearing before the Department of Corporations, to be held in about 45 days. During this time my client remained unable to broker leases. " " In the course of working closely with counsel for the Department I learned that it is their learned opinion that every equipment lease broker must have the license. Though initially requesting an administrative hearing, we did not pursue it when we became aware of the outcome in advance. Whereas we could have gone to court for a trial before a California state judge after its disposition by the administrative judge at the Department of Corporations, the cost and delay would have been prohibitive. " " I had researched the law on more than one occasion even prior to that case and find it more than a little ambiguous. I have also attended panels, and am in fact scheduled to speak at the EAEL Conference next month on this issue. I have heard the opinions of many attorneys I highly respect regarding this highly contentious issue. " "It appears that most lawyers not engaged in defense of this issue before the Department are of the opinion that the license needed, even if all you do are commercial transactions. That is easier said than done, and I know that smaller companies do not want the cost and additional burden of applying for a license. However, it appears the cost of not having a license, if you are "caught" by the Department of Corporations, can be potentially devastating. I am thus compelled to revise my earlier opinion and, at this point, believe the license is mandatory irrespective of the character of the lease. I know there are those who would read the statute differently, as I once did. However, my opinion is based upon my experience with the enforcement agency, rather than a desktop interpretation of the written law, so all I can say is beware and, in my humble opinion, be cautious." Ken Greene |