Home improvement loans: right to cancel contracts.

Senator Durazo's consumer protection legislation extends cancellation periods for home improvement contracts and establishes new oversight requirements for home improvement loans in California. The bill modifies existing contract cancellation windows from three to five business days for most consumers, and from five to seven days for senior citizens, effective January 1, 2026.

The legislation creates a new regulatory framework for home improvement loans, requiring lenders to verify project completion before initiating consumer repayment obligations. For standard improvements, lenders must confirm final permit approvals and operational status. Solar energy system loans specifically require utility interconnection and permission to operate before payments begin. The bill prohibits credit reporting until these verification requirements are met.

Lenders must now provide detailed disclosures about dealer fees and loan terms through both written and oral communications. The legislation mandates recorded confirmation calls with borrowers to review key contract elements, including monthly payments, total costs, and consumer rights. These calls must be conducted in the consumer's preferred language when available. Contractors and their representatives are barred from participating in these verification discussions. The bill also grants consumers expanded rights to request loan documentation, which lenders must provide within 30 business days while maintaining records for five years after loan completion.