How are factoring companies regulated?

Factoring companies are primarily regulated at the state level, with specific regulations varying by jurisdiction. They may be subject to licensing requirements, which can include financial disclosure, compliance with consumer protection laws, and adherence to usury laws regarding interest rates. Additionally, federal regulations, such as those enforced by the Federal Trade Commission (FTC), may apply to prevent deceptive practices. Overall, the regulatory framework aims to ensure transparency and protect businesses from predatory lending practices.