Banking Law News

Fintechs Soften to California Small Business Lending Rules

March 1, 2019, 10:30 AM

California is trying to make cost disclosures for small business lending similar to those for consumer finance, despite reservations from some fintech lenders like PayPal, Inc. and Square, Inc.

The state’s Department of Business Oversight is working on requirements for nonbank commercial lenders and financing companies to use an annualized metric to help small businesses estimate the total cost of financing. It’s also considering penalties for lenders’ noncompliance.

After trying to quash the 2018 legislation that authorized the regulation, fintech lenders and others in the industry are coming around to the idea of using an annualized percentage rate (APR) to...

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