California DFPI Fines PCM Funding $44K for Unlicensed Lending

California DFPI fined Houston-based PCM Funding $44,000 for unlicensed lending activities.

The California Department of Financial Protection and Innovation (DFPI) has issued a consent order against PCM Funding, LLC, a Houston-based commercial lender, for engaging in unlicensed lending activities within California between 2022 and 2025. PCM Funding originated or purchased 18 commercial loan and security agreements without holding the requisite California Financing Law (CFL) license, violating Financial Code section 22100.

Additionally, PCM Funding failed to provide commercially mandated loan disclosures, such as the total cost of financing expressed as an annualized rate. The DFPI found that the lender imposed charges on equipment finance loans that exceeded what is permissible under the CFL.

As a result of the enforcement, PCM Funding agreed to pay a $44,000 administrative penalty and refund nearly $89,000 to the affected 18 California commercial borrowers for overcharges. The company also agreed to cease unlicensed lending activities and must comply with future regulatory requirements as its pending CFL license application undergoes review. DFPI clarified that this consent order will not automatically lead to denial of the license application.

This enforcement action fits into a recent pattern of stringent DFPI oversight targeting unlicensed commercial and crypto-backed lending. Notably, in June 2026, the DFPI imposed a $4 million penalty on Florida-based Navitas Credit Corp. for engaging in unlicensed lending, including the use of unlicensed brokers and charging unlawful interest rates. Navitas committed to refund excess charges on loans under $5,000 issued from 2018 through June 2026.

Similarly, in January 2026, Nexo Capital Inc. was fined $500,000 for offering crypto-backed loans to over 5,400 Californians without a valid CFL license, and for not properly assessing borrowers' ability to repay. Going further back, in December 2024, SALT Lending LLC paid over $300,000 in penalties and refunds related to unlicensed crypto-backed loan activities affecting 151 California residents.

DFPI Commissioner KC Mohseni emphasized the agency’s commitment: "The DFPI is dedicated to keeping the lending marketplace fair and open. Our diligent oversight helps to level the playing field for businesses and protects consumers." Commissioner Clothilde V. Hewlett added that lenders must transparently represent loan terms and disclose inherent risks, particularly in emerging areas like crypto-backed lending.

For corporate legal counsels and compliance teams, the takeaway is clear: rigorously verify licensing status and ensure all required disclosures are made for commercial lending activities in California, to avoid costly penalties and enforcement action.