In keeping with its stated objective of protecting borrowers, the CFL imposes more restrictive restrictions on the activities of consumer lenders and brokers than those that only grant commercial loans. Licensed financial lenders exercising consumer credit must comply with interest rate and royalty restrictions and the CFL contains several provisions highlighting the boD`s right to impose such restrictions on consumer credit with respect to non-public consumer lenders.  In addition, licensed lenders that grant consumer credit are not allowed to pay referral fees to unlicensed companies. A U.S. or foreign company that would like to start lending in California as a lender of licensed funds should also develop an action plan for reconciliation with the licensing process and ongoing compliance with the CFL, including: due to the broad scope of the CFL – which encompasses both commercial lenders, consumer lenders, foreign companies, and state-owned enterprises – all companies that are currently in lending business in California. The market should carefully consider the requirements and restrictions imposed by law. While the CFL`s regulatory system is less burdensome than the requirements for traditional financial institutions, the CFL requires a license as well as ongoing compliance activities for those lending in California.