California legislators voted to require fintechs lending to small businesses to make financing disclosures, despite opposition from PayPal Holdings Inc. and Square Inc., among some other online lenders.
If Gov. Jerry Brown signs the bill before an Oct. 1 deadline, California would be the first state to require truth-in-lending disclosures for commercial loans. Federal disclosure requirements only apply to consumer loans.
The state Senate cleared the bill (S.B. 1235) 28-6 after sponsors relied on a seldom-used procedural maneuver to bring the bipartisan legislation to the floor with minutes to spare before the California legislative session’s Aug. 31 midnight deadline.
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(This story has been updated to clarify the expected completion date for final rules)