CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 1286

Introduced by Senator Min

February 15, 2024

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

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.