| 1 | 1 | | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1466Introduced by Senator MinFebruary 16, 2024 An act to amend Section 1799.302 of the Civil Code, relating to small business. LEGISLATIVE COUNSEL'S DIGESTSB 1466, as introduced, Min. Small business: commercial financing transactions: monitoring fees.Existing law, the California Financing Law, generally regulates commercial loans made by licensees. Existing law prohibits a covered entity, as defined, from charging specified fees in connection with a commercial financing transaction with a small business or small business owner. In this regard, existing law prohibits a fee for monitoring the small businesss collateral unless the underlying commercial financing transaction is delinquent for more than 60 days. Existing law entitles a recipient to specified relief if a covered entity violates these provisions.This bill would, additionally, allow a covered entity to charge a monitoring fee to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 1799.302 of the Civil Code is amended to read:1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 3 | 3 | | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1466Introduced by Senator MinFebruary 16, 2024 An act to amend Section 1799.302 of the Civil Code, relating to small business. LEGISLATIVE COUNSEL'S DIGESTSB 1466, as introduced, Min. Small business: commercial financing transactions: monitoring fees.Existing law, the California Financing Law, generally regulates commercial loans made by licensees. Existing law prohibits a covered entity, as defined, from charging specified fees in connection with a commercial financing transaction with a small business or small business owner. In this regard, existing law prohibits a fee for monitoring the small businesss collateral unless the underlying commercial financing transaction is delinquent for more than 60 days. Existing law entitles a recipient to specified relief if a covered entity violates these provisions.This bill would, additionally, allow a covered entity to charge a monitoring fee to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO |
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| 9 | 9 | | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION |
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| 11 | 11 | | Senate Bill |
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| 13 | 13 | | No. 1466 |
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| 15 | 15 | | Introduced by Senator MinFebruary 16, 2024 |
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| 17 | 17 | | Introduced by Senator Min |
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| 18 | 18 | | February 16, 2024 |
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| 19 | 19 | | |
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| 20 | 20 | | An act to amend Section 1799.302 of the Civil Code, relating to small business. |
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| 21 | 21 | | |
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| 22 | 22 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 23 | 23 | | |
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| 24 | 24 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 25 | 25 | | |
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| 26 | 26 | | SB 1466, as introduced, Min. Small business: commercial financing transactions: monitoring fees. |
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| 27 | 27 | | |
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| 28 | 28 | | Existing law, the California Financing Law, generally regulates commercial loans made by licensees. Existing law prohibits a covered entity, as defined, from charging specified fees in connection with a commercial financing transaction with a small business or small business owner. In this regard, existing law prohibits a fee for monitoring the small businesss collateral unless the underlying commercial financing transaction is delinquent for more than 60 days. Existing law entitles a recipient to specified relief if a covered entity violates these provisions.This bill would, additionally, allow a covered entity to charge a monitoring fee to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral, as specified. |
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| 30 | 30 | | Existing law, the California Financing Law, generally regulates commercial loans made by licensees. Existing law prohibits a covered entity, as defined, from charging specified fees in connection with a commercial financing transaction with a small business or small business owner. In this regard, existing law prohibits a fee for monitoring the small businesss collateral unless the underlying commercial financing transaction is delinquent for more than 60 days. Existing law entitles a recipient to specified relief if a covered entity violates these provisions. |
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| 32 | 32 | | This bill would, additionally, allow a covered entity to charge a monitoring fee to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral, as specified. |
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| 33 | 33 | | |
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| 34 | 34 | | ## Digest Key |
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| 35 | 35 | | |
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| 36 | 36 | | ## Bill Text |
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| 38 | 38 | | The people of the State of California do enact as follows:SECTION 1. Section 1799.302 of the Civil Code is amended to read:1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 40 | 40 | | The people of the State of California do enact as follows: |
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| 42 | 42 | | ## The people of the State of California do enact as follows: |
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| 44 | 44 | | SECTION 1. Section 1799.302 of the Civil Code is amended to read:1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 46 | 46 | | SECTION 1. Section 1799.302 of the Civil Code is amended to read: |
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| 48 | 48 | | ### SECTION 1. |
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| 49 | 49 | | |
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| 50 | 50 | | 1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 52 | 52 | | 1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 54 | 54 | | 1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account.(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.(d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true:(1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business.(2) The underlying commercial financing transaction is delinquent for more than 60 days.(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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| 58 | 58 | | 1799.302. A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner: |
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| 60 | 60 | | (a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferors account. |
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| 62 | 62 | | (b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter. |
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| 64 | 64 | | (c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee. |
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| 66 | 66 | | (d) A fee for monitoring the small businesss collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. either of the following is true: |
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| 68 | 68 | | (1) The fee is charged to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small businesss collateral for the purpose of optimizing funds available to the small business. |
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| 70 | 70 | | (2) The underlying commercial financing transaction is delinquent for more than 60 days. |
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| 72 | 72 | | (e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the businesss assets that exceeds 150 percent of the cost of the filing or termination. |
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