Notice of IOU Financial’s Broker Program Requirements
Due to changes in state law that now impose licensing, registration, and/or disclosure requirements on companies that provide commercial or business-purpose financing, IOU Central Inc. d/b/a IOU Financial [IOU] is obliged to develop a program (the “Broker Program”) for dealing with independent service organizations, broker, marketers, or other third-party service providers (collectively, “Brokers”) who participate in our transactions with potential customers (“Merchants”).
The purpose of this Notice to inform you of new requirements of our Broker Program. We will monitor Brokers for compliance with Broker Program requirements. Please note that failure to comply with the requirements of the Broker Program may result in a suspension or discontinuation of our relationship with a Broker and/or termination of any agreement with a Broker, in accordance with the terms of that agreement.
IOU may update the Broker Program from time to time by notifying you in writing of any changes to the Broker Program.
Requirements for California Merchants
Effective December 9, 2022
Definitions:
- A “California Merchant” means a business that is principally directed or managed from California. If a business provides a California address in an application, the Broker must assume that the business is a “California Merchant.”
- A “Specific Offer” means a written communication (including e-mail and text message) that includes both:
- Any payment amount, irregular payment amount, or financing amount, and
- Any rate, price, or cost of financing, including the total repayment amount.
- “California Disclosure” means the disclosure required by California’s Commercial Financing Disclosure Law.
Requirements:
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- A Broker must not transmit any Specific Offer to a California Merchant related to IOU without IOU’s prior written consent.
- If IOU instructs a Broker to communicate two or more financing options to a California Merchant:
- The Broker must communicate all of the financing options to the California Merchant at the same time; and
- The Broker must communicate to IOU which, if any, of the financing options the California Merchant selects.
- If IOU provides a Broker with a Specific Offer for a California Merchant, IOU also will provide the Broker with a California Disclosure. The Broker must not change or alter the Specific Offer or California Disclosure in any way.
- The Broker must transmit the California Disclosure to the California Merchant at the same time the Broker transmits the Specific Offer.
- Within 24 hours after the Broker has transmitted a California Disclosure to a California Merchant, the Broker must provide IOU with acceptable evidence of the date and time of the transmission. Acceptable evidence includes:
- A copy of an e-mail sent to a California Merchant in which a California Disclosure is an attachment; or
- A copy of a signed and dated California Disclosure.
- A Broker must promptly provide IOU with a copy of any California Disclosure signed by a California Merchant.
- If the Broker uses an electronic record or method to provide a California Disclosure, then the Broker must ensure that the process for obtaining the electronic signature includes an automatic date stamp recording the date on which the California Merchant’s electronic signature was obtained.
- A Broker who provides a California Disclosure must provide the California Merchant with a copy of the California Disclosure in a form that the California Merchant may retain.
Requirements for Utah Merchants
Effective January 1, 2023
Definitions:
- A “Utah Merchant” means a business located in Utah. If a business provides a Utah address in an application, Broker must assume that the business is a “Utah Merchant.”
- “Utah Disclosure” means the disclosure required by Utah’s Commercial Financing Registration and Disclosure Act.
Requirements:
- If IOU provides a Broker with a contract for a Utah Merchant, IOU also will provide the Broker with a Utah Disclosure. The Broker must not change or alter a contract or a Utah Disclosure in any way.
- If a Utah Merchant accepts a contract, the Broker must ensure that the Utah Merchant signs and dates both the contract and the Utah Disclosure.
- The Broker must promptly provide IOU with a copy of any contract and Utah Disclosure signed by a Utah Merchant.
