California’s DFPI Continues Its Commitment to Small Businesses with Latest Proposed Commercial Finance Disclosure Regulations
For immediate release: November 9, 2020
CONTACT:
Caitlin McShane
(415) 225-8855 | caitlin@emcstrategies.com
California’s Department of Financial Protection and Innovation (DFPI) continued its commitment to small businesses across the state with its proposed Commercial Financing Disclosures (SB 1235) regulations. The policies proposed will allow small business owners to seek financing without deception by predatory lenders.
The Responsible Business Lending Coalition (RBLC) supports several guidelines in the Department’s proposal, including mandating annual percentage rate (APR) as the required annualized rate in disclosures; covering all small business financing products from non-banks (including lines of credit and merchant cash advances); and requiring disclosure at the first “specific offer” of financing so that entrepreneurs have the information early on while comparison shopping.
With businesses still grappling with the economic fall-out of COVID-19, this rulemaking could not come at a better time. The RBLC has estimated that implementing SB 1235 could save 127,000 California small businesses as much as $1.4 billion to $12.1 billion annually, with a disproportionate benefit to 11,000 African American-owned businesses and 39,000 Hispanic-owned businesses. This savings to our state’s small businesses can benefit 1.5 million employees and has the potential to create up to 25,000 new local jobs.
The Responsible Business Lending Coalition urges the Department to push forward in its implementation of SB 1235 so that small business owners are supplied with the protections they deserve at a time when they need them the most.
Read our letter in full here.
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Responsible Business Lending Coalition
The Responsible Business Lending Coalition (RBLC) is a network of nonprofit and for-profit lenders, 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 100 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, Funding Circle, LendingClub, Opportunity Finance Network, Opportunity Fund, Small Business Majority, StreetShares, and the Aspen Institute. For more information, visit www.borrowersbillofrights.org
The Responsible Business Lending Coalition (RBLC) is a network of nonprofit and for-profit lenders, 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 100 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, Funding Circle, LendingClub, Opportunity Finance Network, Opportunity Fund, Small Business Majority, StreetShares, and the Aspen Institute. For more information, visit www.borrowersbillofrights.org
