STATEMENT: California and New York Issue First Commercial Lending Disclosure Laws in the Nation
For immediate release: February 2, 2023
CONTACT:
Caitlin McShane
(415) 225-8855 | [email protected]
Washington, D.C., Feb. 2, 2023 — The Responsible Business Lending Coalition (RBLC)—the leading cross-sector small business financing coalition—applauds California and New York for publishing the nation’s foremost commercial lending disclosure laws. These laws will provide much-needed pricing transparency and protections to the millions of California and New York small business owners looking for financing.
The bicoastal victory for small business owners comes as news broke this week that the New York State Department of Financial Services has finally adopted updated commercial financing disclosure regulations with implementation to follow. New York’s news comes on the heels of commercial lenders operating in California being required to abide by the Golden State’s own disclosure laws just last month.
Inundated with various financing options, terms, and rates, small business owners grapple with comparing products in the marketplace. Unfortunately, this conundrum can lead them into a precarious position of having to select a financing option without completely understanding the terms. In the worst case scenario, small business owners may find themselves in a debt cycle they simply cannot escape until they are forced to close.
The laws enacted in these states will transform the playing field for entrepreneurs by mandating commercial financing providers to disclose terms, fees, and other critical pricing information in a clear and concise manner. In doing so, entrepreneurs will be empowered with the only metric known to properly compare financial products across a spectrum of term lengths–annual percentage rate or APR.
The initiative taken by California and New York represent a new era of transparency and innovation for small businesses. In light of the introduction of the federal Small Business Lending Disclosure Act of 2021 during the 117th Congress, they will help pave the way for regulatory interstate harmonization and expand broad protections for small business owners throughout the country.
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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.
