California Finalizes Disclosure Requirements for Small Business Loans

The California Department of Financial Protection and Innovation (DFPI) recently finalized SB 1235 (rule), which adds new provisions to Title 10, Chapter 3 of the California Code of Regulations.  Among other things, this rule will impose certain general additional requirements with respect to commercial loan disclosures described in sections 22800 through 22804 of the California Financial Code, including both closed-end and open-end commercial financing disclosures, factoring disclosures, lease financing disclosures, and various other forms of commercial financing.  Details include instructions on how to calculate and disclose the APR and the finance charge.  The rule takes effect on December 9, 2022.