Commercial financing.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Enrolled
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill aims to regulate commercial financing in California by extending the California Consumer Financial Protection Law (CCFPL) to cover commercial loans, factoring, asset-based lending, and other related transactions. It requires commercial financing providers and brokers to obtain licenses from the California Department of Financial Protection and Innovation and imposes duties such as prohibiting the taking of confessions of judgment. The bill also makes conforming changes to the Financial Code and provides for ongoing reporting requirements and financial assessments for licensees.
Key provisions
- Establishes a definition of ‘commercial financing’ to include accounts receivable purchases, asset-based lending, commercial loans, commercial open-end credit plans, and lease financing.
- Requires commercial financing providers and brokers to obtain a license from the California Department of Financial Protection and Innovation.
- Prohibits taking confessions of judgment or power of attorney before a default.
- Makes conforming changes to the Financial Code to align with the new regulations.
- Requires licensees to maintain a surety bond.
- Establishes annual reporting requirements for licensees.
- Expands the scope of the CCFPL to protect small businesses from abusive financial practices.
- Requires the Department of Financial Protection and Innovation to prescribe rules regarding registration requirements for commercial financing products.
Who is affected
Bill text
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Sponsors
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1 on record
Primary sponsor
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