STATEMENT: California’s Department of Financial Protection and Innovation Ushers New Era of Small Business Protections
For immediate release: December 9, 2022
CONTACT:
Caitlin McShane
(415) 225-8855 | [email protected]
December 9, 2022–The Responsible Business Lending Coalition (RBLC) lauds the California Department of Financial Protection and Innovation for its implementation of the nation’s first small business truth in lending law.
Today, the California Department of Financial Protection and Innovation (DFPI) delivers on a promise of greater transparency, fairness, and protection for the state’s 4.2 million small business owners. As of December 9, 2022, commercial lenders operating in California will be required to disclose essential product metrics such as payment amount, prepayment fees, and, most importantly, annual percentage rate (APR)–the only accurate means of comparing the financing costs of products with varying terms.
Entrepreneurs are not only armed with succinct information to quickly compare and contrast commercial financing products, but they will now have a more comprehensive understanding of how much they will be expected to pay over the course of their financing–interest, fees, and all. This is a long-awaited breakthrough after researchers, advocates, and entrepreneurs themselves have highlighted years of predatory lending practices ranging from targeted, deceptive advertising to hoards of fees buried stealthily in fine print.
After witnessing a rise in irresponsible commercial lending practices, members of the Responsible Business Lending Coalition came together in 2015 to organize and advocate for greater protections in the marketplace–protections not unlike those required for consumer products under the Truth in Lending Act for more than 50 years. The RBLC and its supporters have worked tirelessly across the country to educate lawmakers and regulators, spread awareness through the media, and, most importantly, share first-hand experiences of small business borrowers.
The RBLC thanks the DFPI for its engagement and due diligence in enacting thorough commercial financing disclosure regulations–the first in the nation–and urges state and federal policymakers to follow suit in implementing strong, commonsense protections for 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, Camino Financial, Community Investment Management, Funding Circle, LendingClub, National Association for Latino Community Asset Builders, Opportunity Finance Network, Small Business Majority, and the Aspen Institute. For more information, 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, Camino Financial, Community Investment Management, Funding Circle, LendingClub, National Association for Latino Community Asset Builders, Opportunity Finance Network, Small Business Majority, and the Aspen Institute. For more information, visit www.borrowersbillofrights.org.
