On October 6, the governor of California signed into law SB 362 to increase transparency in commercial financing disclosures. The act prohibits providers of commercial financing from using the terms “interest” or “rate” in a deceptive manner to prevent misleading recipients. It also requires these providers to use the term “annual percentage rate” or “APR” in specified circumstances. The act also repeals the provision that previously subjected commercial financing providers to the California Financing Law (CFL) — and instead establishes that a violation of the bill’s provisions is a violation of the CFL if that violation relates to a commercial financing transaction subject to the CFL (and is otherwise a violation of the California Consumer Financial Protection Law).
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