Bill > SB362

This bill addresses commercial financing disclosures by introducing several key provisions aimed at improving transparency and consumer protection. The bill prohibits commercial financing providers from using certain underwriting methods unless they participate in an annual data reporting process to the commissioner, which involves reporting estimated and actual annual percentage rates (APRs) for completed transactions. Providers are restricted from using the terms "interest" or "rate" unless the rate is calculated as a true annual percentage rate, and they must disclose the APR when presenting financing offers to potential recipients. The bill also changes the enforcement mechanism, stipulating that violations related to commercial financing transactions under the California Financing Law (CFL) will be treated as CFL violations, while violations for transactions not covered by the CFL will be considered unfair or deceptive practices under the California Consumer Financial Protection Law. The bill effectively increases regulatory oversight of commercial financing providers by mandating more precise and transparent communication of financing costs, with the commissioner having the authority to require changes in underwriting methods if significant discrepancies are found between estimated and actual rates.

Budget and Finance, Business and Industry, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB362