Equipment Leasing & Finance Magazine
18 minute read | October.01.2019
In September 2018, California became the first state to enact commercial financing legislation requiring consumer-style disclosures similar to those required for consumer loans under the federal Truth in Lending Act (TILA) and Regulation Z. Senate Bill 1235, the common shorthand for the new statute referring to its assigned legislation number in the California senate, has been effective for approximately a year, as one of the final acts signed into law by outgoing Governor Jerry Brown. Ever since, commercial lenders have been grappling with how to implement the new disclosure requirements.
Fortunately for many of the affected businesses, S.B. 1235 expressly delayed compliance pending issuance of final regulations by the California Department of Business Oversight (DBO). Nonetheless, many nonbank commercial lenders in the equipment leasing and finance marketplace are bracing for the anticipated sea change this law, along with the inevitable copycat legislation likely to emanate from other jurisdictions, will bring.
This article addresses the requirements imposed by S.B. 1235, explores the policy objectives underlying the legislation, discusses the implications of this legislation for the equipment leasing and finance industry, and it provides practical recommendations for companies to comply.