SB-728
Consumer Protection

California Consumer Financial Protection Law: commercial financing.

Introduced
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Requires commercial financing providers to register with state regulators starting January 1, 2027.
  • Prohibits lenders from requiring confessions of judgment or garnishing business accounts before default.
  • Expands state financial protection laws to shield small businesses from predatory lending practices.
  • Mandates commercial financing brokers to publicly display their average and maximum interest rates online.

Summary

Senator Padilla's legislation to expand California's consumer financial protection framework would establish new oversight of commercial financing providers and enhance safeguards for small businesses seeking capital. The bill requires companies offering commercial financing products to register with the Department of Financial Protection and Innovation by January 2027 and prohibits specific practices in commercial lending agreements.

Under the measure, commercial financing providers and brokers would be barred from including confession of judgment clauses or garnishment authorizations in contracts before a default occurs. The bill also prevents these entities from restricting recipients' ability to disclose information about their business dealings with the provider. Commercial financing brokers must publicly display on their websites the average and maximum annual percentage rates for transactions they facilitated in the previous calendar year.

The Department of Financial Protection and Innovation would gain broader authority to regulate commercial financing through new rulemaking powers. The bill expands the department's oversight to include private postsecondary educational institutions when they act as providers of financial products or services. These changes align with the bill's stated aim of protecting small businesses from practices the authors describe as abusive while promoting fair competition in commercial lending markets.

Key Dates

Next Step
Referred to the Senate Standing Committee on Appropriations
Next Step
Senate Committee
Referred to the Senate Standing Committee on Appropriations
Hearing has not been scheduled yet
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Placed on suspense file
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]
Senate Banking and Financial Institutions Hearing
Senate Committee
Senate Banking and Financial Institutions Hearing
Do pass, but first be re-referred to the Committee on [Judiciary]
Introduced
Senate Floor
Introduced
Introduced. To Com. on RLS. for assignment. To print.

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Megan DahleR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Kelly SeyartoR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Steve PadillaD
Senator
Bill Author
Not Contacted
Not Contacted
0 of 8 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Megan DahleR
Senator
Committee Member
Profile
Kelly SeyartoR
Senator
Committee Member
Profile
Steve PadillaD
Senator
Bill Author
Profile
Aisha WahabD
Senator
Committee Member
Profile
Christopher CabaldonD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Committee Member

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Steve Padilla
Steve PadillaD
California State Senator
10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/21/2025)

Latest Voting History

May 5, 2025
PASS
Senate Committee
Senate Appropriations Hearing
AyesNoesNVRTotalResult
7007PASS

Key Takeaways

  • Requires commercial financing providers to register with state regulators starting January 1, 2027.
  • Prohibits lenders from requiring confessions of judgment or garnishing business accounts before default.
  • Expands state financial protection laws to shield small businesses from predatory lending practices.
  • Mandates commercial financing brokers to publicly display their average and maximum interest rates online.

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Steve Padilla
Steve PadillaD
California State Senator

Summary

Senator Padilla's legislation to expand California's consumer financial protection framework would establish new oversight of commercial financing providers and enhance safeguards for small businesses seeking capital. The bill requires companies offering commercial financing products to register with the Department of Financial Protection and Innovation by January 2027 and prohibits specific practices in commercial lending agreements.

Under the measure, commercial financing providers and brokers would be barred from including confession of judgment clauses or garnishment authorizations in contracts before a default occurs. The bill also prevents these entities from restricting recipients' ability to disclose information about their business dealings with the provider. Commercial financing brokers must publicly display on their websites the average and maximum annual percentage rates for transactions they facilitated in the previous calendar year.

The Department of Financial Protection and Innovation would gain broader authority to regulate commercial financing through new rulemaking powers. The bill expands the department's oversight to include private postsecondary educational institutions when they act as providers of financial products or services. These changes align with the bill's stated aim of protecting small businesses from practices the authors describe as abusive while promoting fair competition in commercial lending markets.

10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/21/2025)

Key Dates

Next Step
Referred to the Senate Standing Committee on Appropriations
Next Step
Senate Committee
Referred to the Senate Standing Committee on Appropriations
Hearing has not been scheduled yet
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Placed on suspense file
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]
Senate Banking and Financial Institutions Hearing
Senate Committee
Senate Banking and Financial Institutions Hearing
Do pass, but first be re-referred to the Committee on [Judiciary]
Introduced
Senate Floor
Introduced
Introduced. To Com. on RLS. for assignment. To print.

Latest Voting History

May 5, 2025
PASS
Senate Committee
Senate Appropriations Hearing
AyesNoesNVRTotalResult
7007PASS

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Megan DahleR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Kelly SeyartoR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Steve PadillaD
Senator
Bill Author
Not Contacted
Not Contacted
0 of 8 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Megan DahleR
Senator
Committee Member
Profile
Kelly SeyartoR
Senator
Committee Member
Profile
Steve PadillaD
Senator
Bill Author
Profile
Aisha WahabD
Senator
Committee Member
Profile
Christopher CabaldonD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Committee Member