STATEMENT: California Lawmakers Continue to Stand with Small Business Owners by Unanimously Extending Commonsense Financing Disclosures
For immediate release: September 19, 2023
CONTACT:
Lisa Marlow | Media Relations Manager
(202) 535-3229 | [email protected]
Update, October 10, 2023 - October 9th, 2023 marked a significant milestone as California Governor Newsom signed SB 33: Commercial Financing Disclosure into law. The bill represents a pivotal development for responsible business lending in California, as it effectively enshrines the small business truth in lending framework into permanent law. This crucial move eliminates the previous five-year sunset provision, providing long-term stability and protection for small businesses across the state. Additionally, the legislation formally introduces the term "annual percentage rate (APR)" into the statute, replacing the previous, more general term "annualized rate." This addition will enhance price transparency for small business financing products and empower small business owners across the state to better understand and compare their financing options.
Washington, D.C., September 19, 2023 — Statement on the passage of SB 33, “Commercial Financing: Disclosures” by the California State Legislature, made by Armen Meyer, Head of Public Policy, LendingClub:
We applaud California lawmakers for continuing to act in the best interests of the state’s 4.2 million small business owners by passing SB 33: Commercial Financing Disclosures. With the passage of SB 1235 in 2018, which took effect in December 2022, California demonstrated its leadership as the nation’s first state to require small business finance providers to clearly communicate the cost and terms of their products. SB 1235 ensured that business owners have the same information for business financing that they have come to expect for consumer financing products such as credit cards and home loans for more than 50 years under the federal Truth in Lending Act. SB 33 makes permanent the provision in SB 1235 that requires finance providers to disclose the annual percentage rate (APR) of their products.
Continued disclosure of APR for California’s small business owners will support a healthy business financing market that rewards finance providers for offering the most innovative and affordable products, rather than devising the most misleading pricing information. This will empower business owners to comparison shop and lower prices for small business capital, supporting a thriving economy for main streets across California. We thank the California State Legislature for its unanimous support for the state’s hard-working small business owners.
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About the Responsible Business Lending Coalition
The Responsible Business Lending Coalition (RBLC) is the leading cross-sector voice on small business financial protection. The coalition includes nonprofit and for-profit CDFIs, fintechs, investors, and small business advocates that share a commitment to innovation in small business lending and serious concerns about the rise of irresponsible small business lending. The coalition created the Small Business Borrowers' Bill of Rights, the first cross-sector consensus on the rights that small business owners deserve and what financing providers, brokers and lead generators can do to uphold those rights. Over 110 small business lenders, brokers and lead generators, and advocacy organizations have endorsed these standards. Members of the Responsible Business Lending Coalition include Accion Opportunity Fund, Community Investment Management, LendingClub, Opportunity Finance Network, Small Business Majority, and the Aspen Institute. For more information, visit visit www.borrowersbillofrights.org.
The Responsible Business Lending Coalition (RBLC) is the leading cross-sector voice on small business financial protection. The coalition includes nonprofit and for-profit CDFIs, fintechs, investors, and small business advocates that share a commitment to innovation in small business lending and serious concerns about the rise of irresponsible small business lending. The coalition created the Small Business Borrowers' Bill of Rights, the first cross-sector consensus on the rights that small business owners deserve and what financing providers, brokers and lead generators can do to uphold those rights. Over 110 small business lenders, brokers and lead generators, and advocacy organizations have endorsed these standards. Members of the Responsible Business Lending Coalition include Accion Opportunity Fund, Community Investment Management, LendingClub, Opportunity Finance Network, Small Business Majority, and the Aspen Institute. For more information, visit visit www.borrowersbillofrights.org.
