Perspectives

California has taken a significant step in debt collection regulation by expanding the Rosenthal Fair Debt Collection Practices Act (RFDCPA) to cover specific commercial debt obligations. This move introduces a new layer of legal exposure for creditors, lenders, and collection professionals involved in commercial finance-particularly those engaging with individual borrowers and personal guarantors.

As of July 1, 2025, covered commercial debts in California will be subject to the same strict collection practices previously reserved for consumer debts.

This includes avoiding:

• Harassment or abusive collection practices
• Contacting a debtor’s employer without authorization
• Communicating with a represented debtor
• Any deceptive or misleading collection tactics

Key Legal Update: What Senate Bill 1286 Changes

Traditionally, the RFDCPA applied only to consumer debts-obligations incurred primarily for personal, household, or family use. Now, the law will include:

• “Covered commercial credit” and “covered commercial debt”- defined as debts owed by natural persons, including personal guarantors, for commercial purposes, if the total transactional value is $500,000 or less.
• Types of debt affected include:
  • Commercial loans
  • Accounts receivable financing
  • Factoring and asset-based lending
  • Lease financing
  • Open-end credit lines

This means any individual-whether acting as a direct borrower or as a personal guarantor of a business obligation-will receive protections under the RFDCPA, provided the transaction meets the dollar threshold.

Effective Date and Scope

• Applies to commercial debt entered into, renewed, sold, or assigned on or after July 1, 2025
• Does not apply retroactively to prior transactions
• Applies to original creditors as well as third-party debt collectors and debt buyers

Implications for Credit and Finance Professionals

Violations of the RFDCPA can result in:

• Actual and punitive damages
• Attorney’s fees and costs awarded to the debtor
• Reputational and legal risk to your organization

Best Practices: Preparing for Compliance

 To position your business for regulatory readiness, we recommend the following steps:

Audit Your Commercial Collections Process

Review your current collection protocols, especially those involving personal guarantors or individual borrowers in California. Ensure all communications and outreach methods meet RFDCPA standards.

Implement Training for Staff and Third Parties

Educate internal collections teams, customer service representatives, and any third-party collection vendors on the new legal requirements. Emphasize prohibited conduct, including harassment, unauthorized employer contact, and deceptive communications.

Update Commercial Loan Documentation

Revisit your loan agreements and guaranty language to align with anticipated enforcement risks. Ensure clear delineation between business and personal obligations.

Strengthen Recordkeeping and Communication Controls

Ensure you have robust documentation of all borrower communications and can demonstrate compliance if challenged.

Partner with Legal Counsel Proactively

Engage experienced counsel to review your California-based commercial lending and collections operations. WFJ can help you identify exposure areas and implement changes before the law takes effect.

This new bill represents a growing trend of consumer-style protections being extended into the commercial finance space. For credit and finance professionals managing portfolios with individual guarantors or natural-person borrowers, this is the time to act.

WFJ is here to help you navigate this shift with clarity and confidence. Reach out to us today to learn how this new law may impact your business. 

When you finance or lease heavy equipment, you’re taking a risk-especially if the customer defaults or goes bankrupt. A Purchase Money Security Interest (PMSI) is one of the most powerful tools available to protect your investment and ensure you have top priority in recovering your equipment or getting paid.

A PMSI gives you a “super-priority” status, even over other creditors who previously filed a security interest. But here’s the catch: you only get that priority if you follow the rules to the letter.

If the equipment is inventory, such as parts or rental fleet assets, you must:

• File a UCC-1 financing statement before the customer takes possession
• Send authenticated notice to all other secured parties who have an interest in the same type of inventory.

If you’re financing equipment (like a bulldozer or excavator sold for long-term use), you have a bit more flexibility:

• File the UCC-1 within 20 days after the customer receives the equipment
• No notice to other creditors is required

Failing to meet these deadlines or skipping the notice step can cost you your priority status-meaning another creditor could take possession of the very equipment you financed.

This is where legal guidance becomes critical. 

Working with a trusted law firm ensures that your filings are done properly, your notices are sent on time, and your interests are protected at every step. It’s not just about paperwork-it’s about protecting your bottom line.

Don’t leave your priority to chance. 

Partner with a legal team that understands the nuances of PMSIs and the unique risks faced by heavy equipment dealers. The right legal strategy today could be the reason you recover your equipment tomorrow.

Minnesota employers, change is coming and it’s time to prepare. Beginning in 2026, the State’s new paid family and medical leave program, which is the State is calling MN Paid Leave, will provide workers with paid time off for life events like bonding with a new child, recovering from an illness, or caring for a loved one. If you’re feeling overwhelmed by the details, you’re not alone. At Wagner, Falconer & Judd, we believe in simplifying the complex, so here’s what you need to know.

The Basics: What is MN Paid Leave?

Minnesota passed MN Paid Leave in 2023, and it is a state-run insurance program that provides up to 20 weeks of paid leave per year for qualifying family or medical reasons.

• Contributions Start: January 1, 2026
• Benefits Available to Employees: January 1, 2026
• Administered by: The Minnesota Department of Employment and Economic Development (DEED)

Employer Responsibilities: What You Need to Do

Here’s your action list:

Submit Wage Reports: Starting already on October 31, 2024, you must file quarterly wage detail reports.

Start Payroll Deductions: Contributions being January 1, 2026. Employers and employees share the cost of the total premium rate of 0.88%, with employers and employees each typically paying 0.44% (employees cannot be required to pay more than 0.44%).

Post Notices: You’ll be required to post workplace notices and distribute individual notifications by December 1, 2025.

Maintain Coverage: While an employee is out on MN Paid Leave, you must maintain their health insurance and other benefits coverage.

WFJ Tip: Employers can opt out of the State program if they offer a private plan that meets State standards.

Eligibility: Who Qualifies?

Covered Employers

All private and public employers are covered and must participate in MN Paid Leave (except the federal government).

Covered Employees

To qualify for MN Paid Leave, employees must meet all of the following:

1. Earn at least 5.3% of the statewide average annual wage in the past year (about $3,700 in 2024); and

2(a) Worked at least 50% of their time in MN in a calendar year; or

2(b) If an employee (i) does not work at least 50% of their time in MN or in any other state, and (ii) the employee performs some work in MN and (iii) lives in MN for at least 50% of the calendar year.

Eligible employees includes full-time, part-time, temporary, and most seasonal employees.

Seasonal employees who work less than 150 days during any consecutive 52-week period in hospitality are generally not eligible to MN Paid Leave benefits.

Remote Employees Count Too: Even if your company is based out of state, if you have just one employee working remotely in Minnesota that satisfies the State’s eligibility requirements, then your business must participate in MN Paid Leave.

Independent contractors are not eligible under the employer’s MN Paid Leave contributions, but they may opt into the MN Paid Leave program on their own.

What Leave is Covered?

There are two main types of leave under MN Paid Leave:

• Medical Leave (up to 12 weeks): For the employee’s own serious health condition
• Family Leave (up to 12 weeks): For bonding time with a new child, caring for a family member with a serious condition, addressing a military exigency, or taking safe leave.

Combined Cap: An employee may take up to 20 total weeks of paid leave per benefit year.

Intermittent Leave: Leave can be taken in small blocks (e.g., a few hours or days at a time), with a cap of 480 hours per year for intermittent use.

Reporting and Payroll Deductions: What Goes Where?

Here’s what you’ll need to track and report:

• Quarterly wage detail reports to the State
• Employee payroll deductions (starting in 2026)
• Coordination with PTO/STD: If an employee is also receiving short-term disability (STD) or using PTO, you must report it. Benefits are adjusted to avoid duplication.

How Does MN Paid Leave Work with Other Benefits?

One of the biggest questions we hear from employers is: How does this fit with the FMLA or other leave policies?

• MN Paid Leave and FMLA run concurrently if the reason for leave is a qualifying reason under both MN Paid Leave and FMLA. If an employee qualifies for both, they can’t stack one on top of the other.
• Job protection under MN Paid Leave kicks in once an employee has worked 90 calendar days. 
• Employees can use MN Paid Leave intermittently, but you may limit them to 480 hours of intermittent leave per year.

If you already offer parental leave or short-term disability, MN Paid Leave doesn’t cancel them out, but it will likely require coordination to avoid overpayment or compliance gaps.

Private Plans: Is It Worth Opting Out?

Some employers may choose to offer a private plan instead of participating in the State-run program. To qualify, your plan must:

• Offer benefits at least equal to those provided by the State
• Be approved by DEED
• Be monitored to ensure compliance

Benefits of a private plan may include faster claims processing, better integration with existing policies, and more administrative control.

Penalties and Enforcement

Don’t ignore this law. Employees can sue to enforce rights under MN Paid Leave, and employers can face penalties between $100 and $10,000 per violation. Retaliation against employees who request or take this leave is strictly prohibited.

Your Next Steps

Here’s how to get ready now:

✅ Audit Your Workforce: Identify who may be eligible based on wage and work location.
✅ Evaluate Current Leave Policies: Understand where MN Paid Leave overlaps or conflicts with your current leave policies.
✅ Update Payroll Systems: Prepare for future contributions and reporting.
✅ Plan Your Communications: Clear employee education is critical.
✅ Consider Private Plan Options: If you want more control, explore alternatives.

Need Help Making Sense of MN Paid Leave?

At Wagner, Falconer & Judd, we’re here to help you prepare for changing laws with confidence-not confusion. From policy review to training your HR team, our attorneys can help you navigate the new law while protecting your business.

Contact us today to ensure you’re ready for Minnesota Paid Leave in 2026 and beyond. 

Looking to dive deeper into this subject? Attorney Jordan Cardenas recorded a webinar May 2025 to cover this topic in-depth. You can find that webinar here.

Starting and running a small business comes with many challenges, but by following key best practices, you can set yourself up for success and minimize legal and financial risks. This guide provides actionable insights to help small business owners and aspiring entrepreneurs navigate common pitfalls and build a strong foundation for growth.

Register Trademarks and Copyrights

Why it Matters: Your brand name, logo, and creative works define your business identity. Protecting these assets prevents others from using them without your permission.

Action Steps:

• Conduct a trademark search to ensure your business name is available
• File for trademark protection with the U.S. Patent and Trademark Office
• Register copyrights for original content, such as websites, marketing materials, and product designs

Draft Strong Contracts

Why it Matters: Clear, legally sound contracts reduce disputes and provide protection in case of disagreements with employees, vendors, or clients.

Action Steps:

• Work with an attorney to draft customized agreements
• Ensure contracts cover key terms like payment schedules, deliverables, and termination clauses
• Regularly review and update contracts as your business evolves

Comply with Employment Laws

Why it Matters: Failing to comply with wage, hour and anti-discrimination laws can lead to lawsuits and penalties.

Action Steps:

• Stay informed on federal, state, and local labor laws
• Establish clear policies on wages, overtime, and employee classification
• Provide anti-discrimination and harassment training for employees

Get Proper Business Insurance

Why it Matters: Insurance protects your business from financial losses due to accidents, lawsuits, and unforseen events.

Action Steps: 

• Obtain general liability, professional liability, and worker’s compensation insurance
• Review coverage annually to ensure it meets your business needs
• Work with an insurance expert to identify additional risks specific to your industry

Stay Compliant with Tax Laws

Why it Matters: Failure to meet tax obligations can result in penalties and audits.

Action Steps: 

• Work with a CPA to ensure compliance with federal, state, and local tax requirements
• Keep accurate financial records to streamline tax filing
• Plan for estimated tax payments to avoid year-end surprises

Use a Compliance Partner

Why it Matters: Regulations change frequently, and staying compliant can be complex.

Action Steps: 

• Partner with a law firm or compliance expert to stay ahead of regulatory changes
• Schedule regular compliance audits
• Implement policies and training to ensure ongoing adherence to laws

Separate Business and Personal Finances

Why it Matters: Mixing business and personal finances can create tax issues and legal liability.

Action Steps: 

• Operate separate business bank accounts and credit lines
• Track your business expenses separately for accurate financial reporting
• Pay yourself a salary rather than withdrawing money directly from business accounts

Have Clear Payment Terms

Why it Matters: Updaid invoices can hurt cash flow and profitability.

Action Steps: 

• Require upfront deposits for services or large orders
• Include clear payment terms in contracts
• Implement late payment policies and enforce them consistently

Create an Employee Handbook

Why it Matters: An employee handbook sets clear workplace policies, reducing confusion and disputes.

Action Steps:

• Outline expectations, workplace rules, and disciplinary procedures
• Include policies on harassment, benefits and time off
• Have employees sign an acknowledgment of receipt

Monitor Cash Flow and Financial Health

 Why it Matters: Poor cash flow management can lead to business failure.

Action Steps:

• Regularly review financial statements
• Track income and expenses to detect inefficiencies
• Work with a financial professional to create a budget and forecast future financial needs

Work with a Trusted Law Firm

Why it Matters: Proactive legal counsel can help prevent costly issues before they arise.

Action Steps:

• Establish a relationship with a business attorney early on
• Consult legal counsel before signing
• Stay informed about industry-specific legal requirements

By implementing these best practices, small business owners can mitigate risk, improve financial stability, and position their businesses for long-term success. Proactive planning and professional guidance are key to navigating the complexities of entrepreneurship. To learn more about the strategic partnership Wagner, Falconer & Judd offers business clients, reach out today!

Legal issues can arise when you least expect them-whether it’s a contract you need reviewed, a dispute with a landlord, or simply needing legal advice before making a decision. The good news? With your LegalShield membership, you don’t have to navigate these situations alone or worry about the high cost of hourly attorney fees.

Here’s how the LegalShield membership works, and what kind of support from our team at Wagner, Falconer & Judd you can expect:

Ask Legal Questions Anytime

Have a legal concern or question? With LegalShield you can call your provider law firm or submit your question through the LegalShield app. An attorney will return your call within four business hours to provide guidance and clarity on your situation. Whether it’s a quick question or something more complex, you’ll have experienced legal support just a phone call away.

Recieve Critical Assistance

If you’re dealing with a dispute-say with a contractor, neighbor, or business-our attorneys can step in to help. They can write letters or make phone calls on your behalf, which can often resolve the matter quickly. You’ll also have access to legal templates and documents, giving you the tools you ned to take the right next steps.

Get Feedback on Documents

Need a contract reviewed before signing? You can upload documents directly through the app or online portal, and a WFJ attorney will review them and provide feedback within three buisness days or less. It’s a simple way to make sure you’re protected before you commit to anything in writing.

Hire an Attorney for Less

If your legal needs go beyond what’s included in your membership, you can still access affordable support. LegalSheild members receive at 25% discount off the standard hourly rate for additional services from WFJ-helping you handle more complex legal matters without breaking the bank.

Legal Help that Fits Your Life and Budget

With LegalShield, legal support is no longer out of reach. Whether you’re reviewing a lease, handling a traffic ticket, or navigating a more serious issue, your membership gives you afforable access to trusted attorneys who are ready to help.

Have questions about getting started with your new membership? Contact us to learn more. 

It’s official-U.S. businesses are off the hook when it comes to the Corporate Transparency Act (CTA). In a major development, the Financial Crimes Enforcement Network (FinCEN) has announced an interim final rule that eliminates the requirement for U.S. companies to file a Beneficial Ownership Information (BOI) report. Instead, only entities formed under foreign laws must comply.

What Happened?

The CTA, which took effect in 2024, originally mandated that most U.S. businesses disclose ownership details to FinCEN as part of an effort to combat illicit financial activities. However, ongoing legal challenges questioning the constitutionality of the CTA led FinCEN to reconsider its stance. Rather than engaging in prolonged litigation, FinCEN has effectively withdrawn the requirement for U.S. businesses, leaving only foreign-formed entities subject to compliance.

What This Means for Employers and Business Owners

If you were preparing to submit a BOI report, you can take that off your to-do list. However, this doesn’t mean compliance requirements in other areas are going away. Employers and businesses should stay vigilant aout other regulatory obligations, such as tax filings, employment laws, and industry-specific reporting requirements. 

What’s Next? 

While this ruling brings relief to many businesses, regulatory landscapes can shift quickly. FinCEN may revisit aspects in the future or introduce alternative reporting measures. WFJ will continue monitoring any updates to keep business owners informed. 

For now, U.S. companies can breathe easier knowing they are not required to comply with the CTA. If you have any questions about corporate compliance, WFJ’s legal team is here to help. Stay informed, stay compliant and focus on what you do best-running your business. 

As you are aware, the Corporate Transparency Act (CTA) has been the subject of ongoing legal challenges and regulatory developments. Recent announcements from the Financial Crimes Enforcement Network (FinCEN) and the Treasury Department have further impacted the enforcement and reporting obligations under the CTA. Given these updates, we want to provide clarity on what this means.

Key Developments

• On February 27, 2025, FinCEN announced it will not be enforcing the beneficial ownership information (BOI) reporting obligations under the CTA until a forthcoming interim final rule takes effect.
• On March 2, 2025, the Treasury Department further confirmed that FinCEN will not impose penalties or fines for failing to file BOI reports, both under the existing deadlines and once the new rule is in place.
• The anticipated rule changes will likely narrow the CTA’s scope, requiring only foreign reporting companies to submit BOI reports, thereby exempting most U.S. businesses.
• These announcements follow a court decision in Smith, et al. v. U.S. Department of the Treasury, which initially reinstated CTA reporting obligations but was subsequently addressed by FinCEN’s decision to delay enforcement.
• FinCEN has committed to issuing an interim BOI Reporting Rule by March 21, 2025, and will open a public comment period for potential revisions.

What This Means for Compliance

For now, compliance with the CTA’s BOI reporting requirements is voluntary, and businesses can decide whether to submit their reports by the current deadline or wait for further regulatory clarity. However, businesses should still consider:

• Preparing the necessary BOI information in case reporting becomes mandatory under the final rule.
• Monitoring further regulatory updates, as the scope of required compliance could shift again.

Next Steps

While waiting for further guidance, businesses should take this opportunity to ensure their internal records and policies are current:

• Review corporate records – Confirm that corporate formation documents, ownership records, and governance materials are up to date.
• Assess contracts and agreements – Ensure business agreements are aligned with the most recent regulatory requirements.
• Update compliance policies – Verify internal compliance procedures remain effective and adaptable to potential changes.
• Organize beneficial ownership records – Maintain accurate ownership details to streamline future compliance efforts.

WFJ will continue monitoring developments and will provide updates as more details emerge. If you or your clients have any questions about CTA compliance, or if you would like assistance in preparing for potential obligations, please reach out.

Wagner, Falconer & Judd remains committed to ensuring that you and your clients are informed and prepared to navigate these evolving regulatory requirements.