On Aug. 13, CAL LEG passed bill re small firms' commerical financing.
CAL LEG enrolled Senate bill SB 1521, Committee on banking and financial institutions, commercial financing transactions, fees for small business or small business owner.
Amends Civil Code (CIV) CAL FIN 1799.302 (commercial financing transaction fees).
Collateral Monitoring Fees
Current law enjoins covered entities (financing provider, broker) from charging certain fees to small business/small business owner in connection with commercial financing.
Monitoring collateral, documentation, ACH payment processing (ex insufficient funds).
Additionally, origination fees or lien termination or filing in accordance with provisions of State law against business assets that exceed 150% of the filing/termination cost.
SB 1521 revises CAL FIN 1799.302(d) to add 3 permissible collateral monitoring fees.
Permitted fee to validate collateral, maximize financing for asset-based loan/factoring.
If fee is financing fee per CAL CCR, CAL FIN 10-3-3-943 (commercial finance charges).
Or is a financing fee that is expressed as a dollar percentage of an identifiable base.
Legislative History
On Mar. 11, 2024, bill introduced in Senate; on May 9, 2024, bill passed in Senate.
On May 9, 2024, bill introduced to Assembly; on Aug. 8, 2024, bill passed in Assembly.
On Aug. 9, 2024, bill enrolled in Senate; on Aug. 13, bill presented to the governor.
Effectiveness
Generally, bills with no effective date take effect Jan. following passage, Jan. 1, 2025.
Aug. 19, 2024 CAL LEG Governor Approved
On Aug. 19, 2024, CAL LEG reported governor signed bill into law, assigned Ch. 194.
