Commercial financing: disclosures.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Chaptered
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Overview
This bill aims to prevent commercial financing providers from using misleading language when describing the cost of loans to small businesses. Specifically, it prohibits using terms like "interest" or "rate" in a way that could confuse recipients and requires providers to clearly state the ‘annual percentage rate’ (APR). The bill also modifies enforcement mechanisms, shifting penalties to align with existing consumer financial protection laws.
Key provisions
- Prohibits deceptive use of terms like "interest" or "rate" in commercial financing offers.
- Requires providers to disclose the ‘annual percentage rate’ (APR) in specified circumstances.
- Repeals a previous provision regarding the Commissioner of Financial Protection and Innovation’s enforcement authority.
- Expands the scope of enforcement to include violations under the California Consumer Financial Protection Law for transactions not covered by the California Financing Law.
- Clarifies that using an annual interest rate or APR is not considered deceptive.
- Addresses discrepancies between disclosed APRs and actual APRs.
Who is affected
- Commercial financing providers
- Small businesses seeking commercial financing
- Consumers receiving commercial financing
Notable changes
- Shifts enforcement of disclosure violations to the California Consumer Financial Protection Law for certain transactions.
Bill text
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Sponsors
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1 on record
Primary sponsor
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