This week’s court ruling upholding the California Department of Financial Protection and Innovation’s (DFPI) truth-in-lending rules is a win for each of the 4+ million small business owners across the Golden State. Thanks to the Court’s decision, California small business owners are guaranteed to receive clear disclosure of annual percentage rate (APR), pricing, and terms for small business loans – giving them the transparent, commonsense information necessary to make informed decisions about financing options.
We thank the California Department of Justice and the DFPI for their leadership to promote truth-in-lending, which some lenders fought to block through the courts. Predatory lending has been a widespread problem for small businesses in California and nationwide– with many financing companies hiding predatory terms and interest rates behind promises of fast cash.
It is essential that small businesses continue to have access to clear information about what exactly different financing options cost. As the economy weakens, we expect predatory lenders will come out of the woodwork to target small businesses in need of cash. CAMEO Network is advocating for two California bills, SB 728 (Padilla) and SB 362 (Grayson), that would provide further protections to small businesses against predatory lenders, as well as for a federal truth in lending law for small businesses.