As reported here recently, SB 1235 has been signed into law by Governor Brown. The legislature believes this new law will protect small business owners and empower more small businesses to succeed. Many of the bill’s supporters, including small business owners, believe the passing of this bill was critical not only to the economic health of California but to the entire nation as California becomes the first state to enact truth-in-lending laws that protect small business owners.
Under legislation signed September 30, 2018, by Governor Brown, California will become the first jurisdiction in the United States to provide small business owners with the same protections that Truth-in-Lending laws have provided consumers for more than fifty years.
Under the Residential Mortgage Lending Act (RMLA), the Commissioner of Business Oversight (the “Commissioner”) of the State of California has multiple functions, powers, and duties (Cal. Fin. Code §50301). The Commissioner may also review the business dealings of any residential mortgage lender and servicer California licensee for compliance with the RMLA (Cal. Fin. Code §50302).
The primary purpose of licensing laws is to ensure that license applicants are ethically, financially, & professionally qualified to serve consumers. Under the Residential Mortgage Lending Act (RMLA), licensees have certain duties to fulfill. in Cal. Fin. Code §50124(a), the RMLA creates specific affirmative duties for licensees. A residential mortgage lender or servicer must do all of the following:
There are a variety of ways that a factoring service may benefit a business, thus helping it overcome the typical challenges related to consistency and growth, especially those obstacles encountered by a smaller business enterprise. Factoring doesn’t increase the debt of the business. There is no need or requirement for the encumbering of assets, i.e., collateral.
A year ago, the U.S. Court of Appeals for the Ninth Circuit certified the case, De La Torre v. CashCall, S241434, to the California Supreme Court. The inquiry and question? “Can the interest rate on consumer loans of $2500 or more governed by California Finance Code § 22303, render the loans unconscionable under California Finance Code § 22302?” The Federal court stated that deciding the issue itself would involve it in “impermissible economic policy-making.” In August 2018, the California Supreme Court held that otherwise legal loans may be held unconscionable under the CFLL and California courts indeed have the power to make such a determination.
Unanticipated or unexpected growth may overwhelm a business, especially one that’s growing. Perhaps you’ve increased your marketing team and they’ve ably responded adding new accounts. As sales increase and expectations rise, so do the risks inherent in the business. However, there are ways a small business can more easily facilitate growth while minimizing all the corresponding associated pitfalls. One such way is to engage in the factoring services of a third party.
SB 1235 targets commercial transactions by requiring some commercial lenders to disclose interest rates in some commercial loans. SB 1235 would require commercial finance companies to disclose various costs, rates, and fees. Since June, the bill has been amended again, this time most recently on August 24, with much of the explanatory language contained in the legislation’s definitions deleted.
While a primary need of small businesses is the funding to establish operations, the capital to maintain and expand business operations is just as important. Funding is necessary to pay employees, buy supplies, and market the business. And these are just some of the primary costs of operating a business as there are various other expenses depending on variables such as the type of business and related legal regulations.
In 2018, California real estate agents and brokers became subject to a new set of regulations applicable to advertising by the enactment of AB 1650. Although the bill was signed into law by Governor Brown in August of 2016 (8/19/16), it did not become effective until January 1, 2018. The act in substance was referred to by California legislators as containing “uniform advertising standards.”