Legal Framework

Overview

Proveniq operates within a complex regulatory landscape spanning consumer protection, lending, insurance, and data privacy. This document outlines the key legal frameworks and compliance measures.

Secured Transactions (UCC)

Article 9 Compliance

Proveniq Capital perfects security interests under UCC Article 9:

Filing Process:

1. Borrower grants security interest in collateral
2. UCC-1 Financing Statement filed with Secretary of State
3. Lien recorded on Proveniq Ledger
4. Priority established by filing date

Collateral Description:

• Specific asset identification (serial numbers, descriptions)
• Reference to Ledger asset ID
• SmartTag device ID for monitoring

Priority Rules

Perfection Maintenance

• UCC-1 effective for 5 years
• Continuation statements filed before expiration
• Amendments for collateral changes
• Termination upon loan payoff

Lending Compliance

State Licensing

Proveniq Capital maintains licenses where required:

Federal Regulations

Truth in Lending Act (TILA):

• APR disclosure
• Payment schedule
• Total cost of credit
• Right of rescission (where applicable)

Equal Credit Opportunity Act (ECOA):

• Non-discriminatory underwriting
• Adverse action notices
• Record retention requirements

Fair Debt Collection Practices Act (FDCPA):

• Collection communication standards
• Prohibited practices
• Validation of debts

Usury Considerations

• State usury limits respected
• Rate exportation where permitted
• Alternative structures for high-rate markets

Insurance Regulations

ClaimsIQ Compliance

State Insurance Departments:

• Not acting as insurer or adjuster
• Technology service provider model
• Contracts with licensed carriers

Claims Handling:

• Carrier retains final authority
• ClaimsIQ provides recommendations
• Audit trails for all decisions

Anti-Fraud Compliance:

• Suspicious activity reporting
• Cooperation with investigations
• Data sharing with fraud bureaus

Data Privacy

CCPA (California)

Consumer Rights:

• Right to know data collected
• Right to delete personal information
• Right to opt-out of sale
• Non-discrimination for exercising rights

Proveniq Compliance:

• Privacy policy disclosures
• Data subject request handling
• Vendor contract requirements

GDPR (European Union)

Applicable When:

• EU residents use services
• Processing EU personal data

Key Requirements:

• Lawful basis for processing
• Data minimization
• Right to erasure
• Data portability
• Breach notification (72 hours)

Data Security

Technical Measures:

• Encryption at rest and in transit
• Access controls and authentication
• Audit logging
• Incident response procedures

Organizational Measures:

• Privacy by design
• Employee training
• Vendor management
• Regular assessments

Intellectual Property

Patents

Proveniq maintains patent protection for:

• Locker sensor array configuration
• SmartTag tamper detection methods
• Verification scoring algorithms
• Collateral monitoring systems

Trademarks

Registered marks include:

• PROVENIQ®
• CLAIMSIQ®
• SMARTTAG® (in context)
• Locker device design

Trade Secrets

Protected information:

• ML model architectures
• Fraud detection rules
• Pricing algorithms
• Partner integrations

Contractual Framework

User Agreements

B2B Contracts

Insurance Carriers:

• Data processing agreements
• SLA commitments
• Indemnification provisions

Lending Partners:

• Loan purchase agreements
• Servicing contracts
• Regulatory compliance allocation

Risk Mitigation

Insurance Coverage

Compliance Program

• Chief Compliance Officer
• Regular audits (internal and external)
• Regulatory change monitoring
• Training and certification