SB 1482: Commercial financing.

Existing law, the California Consumer Financial Protection Law (CCFPL), establishes certain consumer protections relating to consumer financial products, practices, and services, including, among others, making it unlawful for covered persons or service providers, as defined, to, among other acts, engage in unlawful, unfair, deceptive, or abusive acts or practices with respect to consumer financial products or services. Existing law establishes that the purpose of the CCFPL is to promote consumer welfare, fair competition, and wealth creation in this state by promoting, among other things, nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive. Existing law authorizes the Department of Financial Protection and Innovation, under the direction of the Commissioner of Financial Protection and Innovation, to prescribe rules regarding registration requirements applicable to a covered person in the business of offering or providing a consumer financial product or service, as defined, and rules requiring the payment of registration fees.

This bill would expand the purposes of the CCFPL to include the protection of small businesses from abusive financial practices, as specified. The bill would prohibit a person from engaging in the business of offering to provide or providing commercial financing transactions or brokerage services to recipients without first registering with the commissioner, as specified. The bill would impose various requirements related to registration for this purpose, including, among others, imposing an application fee of $350. The bill would require a registrant to pay an annual registration fee of $100 plus an assessment equal to the registrants pro rata share of all costs and expenses associated with the administration of the CCFPL, as specified. The bill would require a registrant to submit an annual report to the commissioner, as specified. Under the bill, a registration would be effective until it is revoked by the commissioner or surrendered by the registrant. The bill would impose various duties on commercial financing providers and brokers, including, among other things, prohibiting the taking of a confession of judgment or power of attorney at any time before a default, as specified.