January 23, 2021

Volume XI, Number 23

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DBO Seeks Comments On Commercial Loan Disclosure Rules

This September, Governor Jerry Brown signed SB 1235 (Stats. 2018, Ch. 1011) into law.  In a nutshell, SB 1235 adds a new division to the Financial Code imposing specific loan disclosure requirements on providers of commercial financings.  These disclosures include:

  • The total amount of funds provided;
  • The total dollar cost of financing;
  • The term or estimated term;
  • The method, frequency, and amount of payments;
  • A description of prepayment policies; and,
  • Until January 1, 2024, the total cost of the financing expressed as an annualized rate.

The bill requires the Commissioner of Business Oversight to adopt regulations governing these disclosures.  Cal. Fin. Code § 22804.  As a first step, the Commissioner earlier this week issued an invitation for comments on these as yet to be proposed regulations.  Mercifully, commercial financing providers are not required to comply with the new disclosure requirements until the Commissioner's regulations are adopted and become effective.  Cal. Fin. Code § 22804(c).  

For more on this legislation, see this earlier post.

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© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume VIII, Number 341
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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