Bill Text: CA SB1286 | 2023-2024 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Rosenthal Fair Debt Collection Practices Act: covered debt: commercial debts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-06-03 - Referred to Coms. on B. & F. and JUD. [SB1286 Detail]

Download: California-2023-SB1286-Introduced.html

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CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1286

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Introduced by Senator Min

February 15, 2024

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An act to amend Section 1799.302 of the Civil Code, relating to finance.

LEGISLATIVE COUNSEL'S DIGEST

SB 1286, as introduced, Min. Commercial financing transactions: fees.

Existing law prohibits a covered entity, as defined, from charging certain fees in connection with a commercial financing transaction, as defined, with a small business or small business owner, including a fee for monitoring the small business’s collateral unless the underlying commercial financing transaction is delinquent for more than 60 days.

This bill would make a nonsubstantive change to that provision.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 1799.302 of the Civil Code is amended to read:

1799.302.

 A covered entity shall not charge any of the following in connection with a commercial financing transaction with a small business or small business owner:

(a) A fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except for a fee imposed for a payment by an automated clearinghouse transfer that fails because of insufficient funds in the transferor’s account.

(b) A fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining amount owed, including, but not limited to, interest accrued to the date the statement is prepared and a means of calculating per diem interest accruing thereafter.

(c) A fee in addition to an origination fee that does not have a clear corresponding service provided for the fee, including, but not limited to, a risk assessment, due diligence, or platform fee.

(d) A fee for monitoring the small business’s business’ collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days.

(e) A fee for filing or terminating a lien filed in accordance with the provisions of the Uniform Commercial Code against the business’s assets that exceeds 150 percent of the cost of the filing or termination.