Governor Brown Signs California Rate Disclosure Bill-1235
On Sunday, September 30, 2018 Governor Brown signed into law California Senate Bill 1235. The new law will require consumer-like disclosures to be made on certain commercial finance products under $500,000, including small business loans and merchant cash advances, among other things. It does not cover true leases. There is no date certain for the law to take effect. Rather, the California Department of Business Oversight ("DBO") is required to adopt regulations addressing details such as the methods of calculation, the format, the time and the manner of the new disclosures. The DBO will specify the date by which finance companies are required to comply.
The new law requires that the following be included in qualifying commercial loans:
(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.
It is unlikely that compliance with the new law will be required before late 2019 or early 2020. We will be monitoring closing for updates from the DBO and will keep you apprised.
GLASS & GOLDBERG, ALC
22917 Burbank Blvd.
Woodland Hills, CA 91367-4203.
(818) 888-2220
Regards
Marshall Goldberg
(Selected for Inclusion in 2019 SuperLawyers Magazine-10th consecutive year)
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There are a variety of ways that a factoring service may benefit a business, thus helping it overcome the typical challenges related to consistency and growth, especially those obstacles encountered by a smaller business enterprise. Factoring doesn't increase the debt of the business. There is no need or requirement for the encumbering of assets, i.e., collateral.
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The primary purpose of licensing laws is to ensure that license applicants are ethically, financially, & professionally qualified to serve consumers. Under the Residential Mortgage Lending Act (RMLA), licensees have certain duties to fulfill. in Cal. Fin. Code §50124(a), the RMLA creates specific affirmative duties for licensees. A residential mortgage lender or servicer must do all of the following:
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October 2018
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Glass & Goldberg
22917 Burbank Blvd.
Woodland Hills, CA 91367-4203
Phone: (818) 888-2220
Fax: (818) 888
-2229
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