What obligation does the California Finance Lender Law (CFLL) impose on lenders?

The California Finance Lender Law (CFLL) establishes that lenders are required to obtain a license to conduct business legally within California. This licensing requirement ensures that lenders adhere to specific regulations designed to protect consumers and maintain a standard of professionalism in financial transactions.

Being licensed involves undergoing a vetting process that checks the lender's financial stability, ethical standing, and compliance with applicable laws, thus holding them accountable to both state and federal regulations. Licensing serves as a critical measure to help prevent predatory lending practices and to ensure that consumers have recourse in cases of unfair treatment or misconduct by lenders.

While the other options present various requirements that might be associated with financial practices, they do not encompass the primary obligation the CFLL imposes on lenders, which is the necessity of obtaining the proper licensing to operate legally within the state.