| 1 | | - | Senate Bill No. 33 CHAPTER 376An act to amend Section 22804 of, to amend and repeal Sections 22802 and 22803 of, and to add Section 22806 to, the Financial Code, relating to commercial financing. [ Approved by Governor October 07, 2023. Filed with Secretary of State October 07, 2023. ] LEGISLATIVE COUNSEL'S DIGESTSB 33, Glazer. Commercial financing: disclosures.Existing law requires a provider who extends a specific offer of commercial financing to a recipient, as defined, to disclose specified information relating to that transaction to the recipient and to obtain the recipients signature on that disclosure before consummating the commercial financing transaction. Existing law, until January 1, 2024, requires a provider to disclose the total cost of financing expressed as an annualized rate.Existing law authorizes a provider who offers financing that is factoring or asset-based lending, in lieu of the disclosure described above, to provide an alternative disclosure that may be based on an example of a transaction that could occur under the general agreement for a given amount of accounts receivables and that meets specified requirements. Existing law, until January 1, 2024, requires that alternative disclosure to disclose the total cost of financing expressed as an annualized rate.Existing law requires the Commissioner of Financial Protection and Innovation to adopt regulations governing these disclosure requirements and requires those regulations to include specified information and determinations, including, among other things, the appropriate method to express the annualized rate and the types of fees and charges to be included in the calculation. Existing law makes providers subject to examination and enforcement by the commissioner under the California Financing Law (CFL) for any violation of these provisions or of any rule or order adopted pursuant to these provisions, as specified. The CFL authorizes the commissioner to bring an action to enjoin, as specified, against a person who, in the commissioners estimation, has violated or is about to violate the CFL and authorizes the imposition of civil penalties to that effect. A willful violation of the CFL is a crime, except as specified.This bill would require providers to continue to include in the disclosures and alternative disclosures the total cost of financing expressed as an annualized rate, as described above, indefinitely. By expanding the scope of an existing crime with regard to willful violations of the CFL, this bill would impose a state-mandated local program. The bill would make conforming changes to the provisions describing the regulations adopted by the commissioner governing these disclosure requirements.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate.SEC. 2. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 3. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate.SEC. 4. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 5. Section 22804 of the Financial Code is amended to read:22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code.SEC. 6. Section 22806 is added to the Financial Code, immediately following Section 22805, to read:22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason.SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 1 | + | Enrolled September 18, 2023 Passed IN Senate September 14, 2023 Passed IN Assembly September 13, 2023 Amended IN Assembly September 05, 2023 Amended IN Assembly June 21, 2023 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 33Introduced by Senator GlazerDecember 05, 2022An act to amend Section 22804 of, to amend and repeal Sections 22802 and 22803 of, and to add Section 22806 to, the Financial Code, relating to commercial financing. LEGISLATIVE COUNSEL'S DIGESTSB 33, Glazer. Commercial financing: disclosures.Existing law requires a provider who extends a specific offer of commercial financing to a recipient, as defined, to disclose specified information relating to that transaction to the recipient and to obtain the recipients signature on that disclosure before consummating the commercial financing transaction. Existing law, until January 1, 2024, requires a provider to disclose the total cost of financing expressed as an annualized rate.Existing law authorizes a provider who offers financing that is factoring or asset-based lending, in lieu of the disclosure described above, to provide an alternative disclosure that may be based on an example of a transaction that could occur under the general agreement for a given amount of accounts receivables and that meets specified requirements. Existing law, until January 1, 2024, requires that alternative disclosure to disclose the total cost of financing expressed as an annualized rate.Existing law requires the Commissioner of Financial Protection and Innovation to adopt regulations governing these disclosure requirements and requires those regulations to include specified information and determinations, including, among other things, the appropriate method to express the annualized rate and the types of fees and charges to be included in the calculation. Existing law makes providers subject to examination and enforcement by the commissioner under the California Financing Law (CFL) for any violation of these provisions or of any rule or order adopted pursuant to these provisions, as specified. The CFL authorizes the commissioner to bring an action to enjoin, as specified, against a person who, in the commissioners estimation, has violated or is about to violate the CFL and authorizes the imposition of civil penalties to that effect. A willful violation of the CFL is a crime, except as specified.This bill would require providers to continue to include in the disclosures and alternative disclosures the total cost of financing expressed as an annualized rate, as described above, indefinitely. By expanding the scope of an existing crime with regard to willful violations of the CFL, this bill would impose a state-mandated local program. The bill would make conforming changes to the provisions describing the regulations adopted by the commissioner governing these disclosure requirements.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate.SEC. 2. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 3. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate.SEC. 4. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 5. Section 22804 of the Financial Code is amended to read:22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code.SEC. 6. Section 22806 is added to the Financial Code, immediately following Section 22805, to read:22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason.SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 14 | 25 | | |
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| 15 | 26 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 16 | 27 | | |
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| 17 | 28 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 18 | 29 | | |
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| 19 | 30 | | SB 33, Glazer. Commercial financing: disclosures. |
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| 20 | 31 | | |
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| 21 | 32 | | Existing law requires a provider who extends a specific offer of commercial financing to a recipient, as defined, to disclose specified information relating to that transaction to the recipient and to obtain the recipients signature on that disclosure before consummating the commercial financing transaction. Existing law, until January 1, 2024, requires a provider to disclose the total cost of financing expressed as an annualized rate.Existing law authorizes a provider who offers financing that is factoring or asset-based lending, in lieu of the disclosure described above, to provide an alternative disclosure that may be based on an example of a transaction that could occur under the general agreement for a given amount of accounts receivables and that meets specified requirements. Existing law, until January 1, 2024, requires that alternative disclosure to disclose the total cost of financing expressed as an annualized rate.Existing law requires the Commissioner of Financial Protection and Innovation to adopt regulations governing these disclosure requirements and requires those regulations to include specified information and determinations, including, among other things, the appropriate method to express the annualized rate and the types of fees and charges to be included in the calculation. Existing law makes providers subject to examination and enforcement by the commissioner under the California Financing Law (CFL) for any violation of these provisions or of any rule or order adopted pursuant to these provisions, as specified. The CFL authorizes the commissioner to bring an action to enjoin, as specified, against a person who, in the commissioners estimation, has violated or is about to violate the CFL and authorizes the imposition of civil penalties to that effect. A willful violation of the CFL is a crime, except as specified.This bill would require providers to continue to include in the disclosures and alternative disclosures the total cost of financing expressed as an annualized rate, as described above, indefinitely. By expanding the scope of an existing crime with regard to willful violations of the CFL, this bill would impose a state-mandated local program. The bill would make conforming changes to the provisions describing the regulations adopted by the commissioner governing these disclosure requirements.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason. |
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| 22 | 33 | | |
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| 23 | 34 | | Existing law requires a provider who extends a specific offer of commercial financing to a recipient, as defined, to disclose specified information relating to that transaction to the recipient and to obtain the recipients signature on that disclosure before consummating the commercial financing transaction. Existing law, until January 1, 2024, requires a provider to disclose the total cost of financing expressed as an annualized rate. |
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| 24 | 35 | | |
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| 25 | 36 | | Existing law authorizes a provider who offers financing that is factoring or asset-based lending, in lieu of the disclosure described above, to provide an alternative disclosure that may be based on an example of a transaction that could occur under the general agreement for a given amount of accounts receivables and that meets specified requirements. Existing law, until January 1, 2024, requires that alternative disclosure to disclose the total cost of financing expressed as an annualized rate. |
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| 26 | 37 | | |
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| 27 | 38 | | Existing law requires the Commissioner of Financial Protection and Innovation to adopt regulations governing these disclosure requirements and requires those regulations to include specified information and determinations, including, among other things, the appropriate method to express the annualized rate and the types of fees and charges to be included in the calculation. Existing law makes providers subject to examination and enforcement by the commissioner under the California Financing Law (CFL) for any violation of these provisions or of any rule or order adopted pursuant to these provisions, as specified. The CFL authorizes the commissioner to bring an action to enjoin, as specified, against a person who, in the commissioners estimation, has violated or is about to violate the CFL and authorizes the imposition of civil penalties to that effect. A willful violation of the CFL is a crime, except as specified. |
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| 28 | 39 | | |
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| 29 | 40 | | This bill would require providers to continue to include in the disclosures and alternative disclosures the total cost of financing expressed as an annualized rate, as described above, indefinitely. By expanding the scope of an existing crime with regard to willful violations of the CFL, this bill would impose a state-mandated local program. The bill would make conforming changes to the provisions describing the regulations adopted by the commissioner governing these disclosure requirements. |
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| 30 | 41 | | |
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| 31 | 42 | | The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. |
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| 32 | 43 | | |
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| 33 | 44 | | This bill would provide that no reimbursement is required by this act for a specified reason. |
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| 34 | 45 | | |
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| 35 | 46 | | ## Digest Key |
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| 36 | 47 | | |
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| 37 | 48 | | ## Bill Text |
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| 38 | 49 | | |
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| 39 | 50 | | The people of the State of California do enact as follows:SECTION 1. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate.SEC. 2. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 3. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate.SEC. 4. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed.SEC. 5. Section 22804 of the Financial Code is amended to read:22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code.SEC. 6. Section 22806 is added to the Financial Code, immediately following Section 22805, to read:22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason.SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 40 | 51 | | |
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| 41 | 52 | | The people of the State of California do enact as follows: |
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| 42 | 53 | | |
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| 43 | 54 | | ## The people of the State of California do enact as follows: |
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| 44 | 55 | | |
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| 45 | 56 | | SECTION 1. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate. |
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| 46 | 57 | | |
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| 47 | 58 | | SECTION 1. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read: |
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| 48 | 59 | | |
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| 49 | 60 | | ### SECTION 1. |
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| 50 | 61 | | |
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| 51 | 62 | | 22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate. |
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| 52 | 63 | | |
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| 53 | 64 | | 22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate. |
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| 54 | 65 | | |
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| 55 | 66 | | 22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction.(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:(1) The total amount of funds provided.(2) The total dollar cost of the financing.(3) The term or estimated term.(4) The method, frequency, and amount of payments.(5) A description of prepayment policies.(6) The total cost of the financing expressed as an annualized rate. |
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| 56 | 67 | | |
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| 57 | 68 | | |
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| 58 | 69 | | |
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| 59 | 70 | | 22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipients signature on the disclosure before consummating the commercial financing transaction. |
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| 60 | 71 | | |
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| 61 | 72 | | (b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following: |
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| 62 | 73 | | |
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| 63 | 74 | | (1) The total amount of funds provided. |
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| 64 | 75 | | |
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| 65 | 76 | | (2) The total dollar cost of the financing. |
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| 66 | 77 | | |
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| 67 | 78 | | (3) The term or estimated term. |
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| 68 | 79 | | |
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| 69 | 80 | | (4) The method, frequency, and amount of payments. |
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| 70 | 81 | | |
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| 71 | 82 | | (5) A description of prepayment policies. |
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| 72 | 83 | | |
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| 73 | 84 | | (6) The total cost of the financing expressed as an annualized rate. |
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| 74 | 85 | | |
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| 75 | 86 | | SEC. 2. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed. |
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| 76 | 87 | | |
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| 77 | 88 | | SEC. 2. Section 22802 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed. |
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| 78 | 89 | | |
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| 79 | 90 | | ### SEC. 2. |
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| 80 | 91 | | |
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| 81 | 92 | | |
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| 82 | 93 | | |
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| 83 | 94 | | SEC. 3. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read:22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate. |
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| 84 | 95 | | |
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| 85 | 96 | | SEC. 3. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is amended to read: |
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| 86 | 97 | | |
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| 87 | 98 | | ### SEC. 3. |
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| 88 | 99 | | |
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| 89 | 100 | | 22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate. |
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| 90 | 101 | | |
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| 91 | 102 | | 22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate. |
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| 92 | 103 | | |
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| 93 | 104 | | 22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:(a) An amount financed.(b) The total dollar cost.(c) The term or estimated term.(d) The method, frequency, and amount of payments.(e) A description of prepayment policies.(f) The total cost of the financing expressed as an annualized rate. |
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| 94 | 105 | | |
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| 95 | 106 | | |
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| 96 | 107 | | |
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| 97 | 108 | | 22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables: |
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| 98 | 109 | | |
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| 99 | 110 | | (a) An amount financed. |
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| 100 | 111 | | |
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| 101 | 112 | | (b) The total dollar cost. |
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| 102 | 113 | | |
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| 103 | 114 | | (c) The term or estimated term. |
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| 104 | 115 | | |
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| 105 | 116 | | (d) The method, frequency, and amount of payments. |
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| 106 | 117 | | |
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| 107 | 118 | | (e) A description of prepayment policies. |
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| 108 | 119 | | |
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| 109 | 120 | | (f) The total cost of the financing expressed as an annualized rate. |
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| 110 | 121 | | |
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| 111 | 122 | | SEC. 4. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed. |
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| 112 | 123 | | |
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| 113 | 124 | | SEC. 4. Section 22803 of the Financial Code, as added by Section 2 of Chapter 1011 of the Statutes of 2018, is repealed. |
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| 114 | 125 | | |
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| 115 | 126 | | ### SEC. 4. |
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| 116 | 127 | | |
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| 117 | 128 | | |
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| 118 | 129 | | |
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| 119 | 130 | | SEC. 5. Section 22804 of the Financial Code is amended to read:22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. |
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| 120 | 131 | | |
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| 121 | 132 | | SEC. 5. Section 22804 of the Financial Code is amended to read: |
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| 122 | 133 | | |
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| 123 | 134 | | ### SEC. 5. |
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| 124 | 135 | | |
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| 125 | 136 | | 22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. |
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| 126 | 137 | | |
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| 127 | 138 | | 22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. |
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| 128 | 139 | | |
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| 129 | 140 | | 22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.(3) Requirements concerning the time, manner, and format of the disclosure.(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. |
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| 130 | 141 | | |
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| 131 | 142 | | |
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| 132 | 143 | | |
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| 133 | 144 | | 22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following: |
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| 134 | 145 | | |
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| 135 | 146 | | (1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803. |
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| 136 | 147 | | |
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| 137 | 148 | | (2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803. |
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| 138 | 149 | | |
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| 139 | 150 | | (b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following: |
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| 140 | 151 | | |
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| 141 | 152 | | (1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation. |
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| 142 | 153 | | |
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| 143 | 154 | | (2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation. |
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| 144 | 155 | | |
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| 145 | 156 | | (3) Requirements concerning the time, manner, and format of the disclosure. |
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| 146 | 157 | | |
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| 147 | 158 | | (c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. |
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| 148 | 159 | | |
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| 149 | 160 | | SEC. 6. Section 22806 is added to the Financial Code, immediately following Section 22805, to read:22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. |
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| 150 | 161 | | |
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| 151 | 162 | | SEC. 6. Section 22806 is added to the Financial Code, immediately following Section 22805, to read: |
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| 152 | 163 | | |
|---|
| 153 | 164 | | ### SEC. 6. |
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| 154 | 165 | | |
|---|
| 155 | 166 | | 22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. |
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| 156 | 167 | | |
|---|
| 157 | 168 | | 22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. |
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| 158 | 169 | | |
|---|
| 159 | 170 | | 22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. |
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| 160 | 171 | | |
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| 161 | 172 | | |
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| 162 | 173 | | |
|---|
| 163 | 174 | | 22806. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. |
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| 164 | 175 | | |
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| 165 | 176 | | SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 166 | 177 | | |
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| 167 | 178 | | SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 168 | 179 | | |
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| 169 | 180 | | SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 170 | 181 | | |
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| 171 | 182 | | ### SEC. 7. |
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