The California Financing Law (CFL) provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Financial Protection and Innovation, including by regulating the provision of commercial loans, as defined. A willful violation of the CFL is a crime, except as specified.
This bill would, beginning January 1, 2028, generally provide for the regulation under the CFL of commercial financing, which the bill would define to mean an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing, intended by the recipient for use primarily for a purpose other than a personal, family, or household purpose, as specified. The bill would prohibit a person from engaging in the business of a commercial financing provider, as defined, or a commercial financing broker, as defined, without obtaining a license from the commissioner, except as specified. The bill would impose various duties on commercial financing providers and commercial financing brokers, including, among other things, prohibiting the taking of a confession of judgment or power of attorney at any time before a default, as specified. The bill would make various conforming changes to the CFL.
Existing law requires a provider of commercial financing to disclose certain information, as specified. Existing law deems certain violations of these provisions to be a violation of the CFL, as specified. The CFL authorizes the commissioner to require that rates of charge, if stated by a licensee, be stated fully and clearly in the manner that the commissioner deems necessary to prevent misunderstanding by prospective borrowers or property owners.
This bill would authorize the commissioner to require that rates of charge be stated fully and clearly in the manner that the commissioner deems necessary to prevent misunderstanding by prospective borrowers or recipients.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Statutes affected:
AB2116: 94918.5 EDC, 90000 FIN, 90002 FIN, 90003 FIN, 90005 FIN
02/18/26 - Introduced: 94918.5 EDC, 90000 FIN, 90002 FIN, 90003 FIN, 90005 FIN
04/16/26 - Amended Assembly: 94918.5 EDC, 90000 FIN, 90002 FIN, 90003 FIN, 90005 FIN
06/04/26 - Amended Senate: 22001 FIN, 22001 FIN, 22007 FIN, 22007 FIN, 22010 FIN, 22010 FIN, 22101 FIN, 22101 FIN, 22101.5 FIN, 22101.5 FIN, 22102 FIN, 22102 FIN, 22103 FIN, 22103 FIN, 22104 FIN, 22104 FIN, 22105 FIN, 22105 FIN, 22106 FIN, 22106 FIN, 22107 FIN, 22107 FIN, 22109 FIN, 22109 FIN, 22112 FIN, 22112 FIN, 22151 FIN, 22151 FIN, 22152 FIN, 22152 FIN, 22153 FIN, 22153 FIN, 22154 FIN, 22154 FIN, 22155 FIN, 22155 FIN, 22156 FIN, 22156 FIN, 22157 FIN, 22157 FIN, 22157.1 FIN, 22157.1 FIN, 22159 FIN, 22159 FIN, 22161 FIN, 22161 FIN, 22162 FIN, 22162 FIN, 22163 FIN, 22163 FIN, 22164 FIN, 22164 FIN, 22168 FIN, 22168 FIN, 22169 FIN, 22169 FIN, 22700 FIN, 22700 FIN, 22701 FIN, 22701 FIN, 22712 FIN, 22712 FIN, 22714 FIN, 22714 FIN
06/22/26 - Amended Senate: 22001 FIN, 22002 FIN, 22002 FIN, 22007 FIN, 22010 FIN, 22101 FIN, 22101.5 FIN, 22102 FIN, 22103 FIN, 22104 FIN, 22105 FIN, 22106 FIN, 22107 FIN, 22109 FIN, 22112 FIN, 22151 FIN, 22152 FIN, 22153 FIN, 22154 FIN, 22155 FIN, 22156 FIN, 22157 FIN, 22157.1 FIN, 22159 FIN, 22161 FIN, 22162 FIN, 22163 FIN, 22164 FIN, 22168 FIN, 22169 FIN, 22700 FIN, 22701 FIN, 22712 FIN, 22714 FIN
07/02/26 - Amended Senate: 22001 FIN, 22002 FIN, 22007 FIN, 22010 FIN, 22101 FIN, 22101.5 FIN, 22102 FIN, 22103 FIN, 22104 FIN, 22105 FIN, 22106 FIN, 22107 FIN, 22109 FIN, 22112 FIN, 22151 FIN, 22153 FIN, 22156 FIN, 22157 FIN, 22157.1 FIN, 22159 FIN, 22161 FIN, 22162 FIN, 22163 FIN, 22164 FIN, 22168 FIN, 22169 FIN, 22700 FIN, 22701 FIN, 22712 FIN, 22714 FIN, 22807 FIN, 22807 FIN
AB 2116: 94918.5 EDC, 90000 FIN, 90002 FIN, 90003 FIN, 90005 FIN