Home improvement loans: right to cancel contracts.

Senator Durazo's legislation extends cancellation periods for home improvement contracts and establishes new consumer protections for home improvement loans in California. The bill increases the standard cancellation window from three to five business days, while senior citizens receive seven days to cancel contracts. These extended timeframes take effect January 1, 2026.

The measure creates comprehensive regulations for home improvement loans, requiring lenders to verify improvements are complete and operational before initiating consumer repayment obligations. Lenders must conduct recorded confirmation calls with borrowers to review key loan terms, including monthly payments, interest rates, and fees. The legislation mandates that these calls accommodate consumers' language preferences and prohibits contractors from participating.

For enhanced transparency, lenders must disclose dealer fees both orally and in writing before loan execution. The bill grants consumers the right to assert claims against lenders for misrepresentations about loan terms or promised financial benefits. Lenders must maintain detailed records of transactions, confirmations, and investigations for five years and provide consumers access to this documentation within 30 business days of request, without charging fees.