Bill > AB2558

This bill, by changing existing laws that regulate financial institutions, specifically the California Financing Law (CFL) and the California Deferred Deposit Transaction Law (CDDTL), would limit the interest rates that can be charged on certain small loans and deferred deposit transactions. For loans less than $2,500 made by licensees under the CFL, and for all deferred deposit transactions regulated by the CDDTL, the bill would replace current interest rate caps with a new annual percentage rate (APR) that is to be determined and calculated according to specific federal laws and regulations, namely the Military Lending Act (MLA) and its implementing regulations, as they were in effect on January 1, 2026. The MLA is a federal law designed to protect active duty military members and their dependents from predatory lending practices, and this bill proposes to apply its rate limitations to a broader group of borrowers in California for these specific types of transactions. By establishing new criminal penalties for violations of these modified interest rate limits, the bill would impose a state-mandated local program, though it also states that no reimbursement is required for local agencies or school districts for these costs.

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB2558