California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 3 - Commercial Financing Disclosures
Section 901 - General Requirements
Universal Citation: 10 CA Code of Regs 901
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Disclosures provided in accordance with sections 22800 through 22804 of the code shall comply with the following requirements.
(1) At the
top of the disclosure, centered on the page or other display medium, the
provider shall print "OFFER SUMMARY -" in bold font, followed by a one- to
five-word description of the type of product offered (e.g., "Merchant Cash
Advance") which may include the financer's branding terminology.
(2) For any disclosure required to comply
with section
920, subdivision (a), at the
bottom of the disclosure, below any other information required by this
subchapter, the provider shall print the following statement: "Applicable law
requires this information to be provided to you to help you make an informed
decision. By signing below, you are confirming that you received this
information." Below the statement, the provider shall include a space for the
recipient to sign the form labeled "Recipient Signature" and a space for the
recipient to write the date of their signature, labeled "Date."
(3) For any disclosure other than a
disclosure required to comply with section
920, subdivision (a), at the
bottom of the disclosure, below any other information required by this
subchapter, the provider shall include the following statement: "Applicable law
requires this information to be provided to you to help you make an informed
decision."
(4) If the term or
estimated term of a transaction is:
(A) One
year or less, the term or estimated term shall be disclosed in days;
(B) Greater than one year, the term or
estimated term shall be disclosed in units of years and months, with any
remaining days expressed as a portion of a month to the nearest two decimal
points.
(5) The annual
percentage rate shall be expressed to the nearest ten basis points. For
example: "10.45%."
(6) The
disclosures shall be presented to the recipient as a separate document from any
other contract, agreement, or other disclosure document provided to the
recipient, but may be mailed or transmitted in a package that contains other
documents.
(7) Fonts
(A) The provider may present the required
disclosure in fonts and colors that are clear, complete, conspicuous, easy to
compare with other disclosures, and consistent with the requirements of this
subchapter. A provider shall not use colors and fonts that make any enumerated
terms required by section
22802, subdivision (b), of the
code more clear or conspicuous than any other term required by that
subdivision.
(B) A provider shall
use fonts for the disclosures substantially similar in size to:
(i) Times New Roman 12- to 14-point font, for
information appearing in the first and second columns where those columns are
not combined with other columns.
(ii) Times New Roman 10- to 12-point font,
for information appearing in the third column, information appearing in cells
where the second and third columns are combined, and information appearing in
cells where the first, second, and third columns are combined.
(iii) Times New Roman 16-point font for the
content required by subdivision (a)(1) of this section.
(C) Notwithstanding subdivision (a)(7)(B), a
provider may use a font substantially similar in size to Times New Roman
16-point font for "OFFER SUMMARY -" and content appearing in the first and
second columns of the disclosure where those columns are not combined with
other columns.
(D) A provider may
deviate from the font requirements described in subdivisions (a)(7)(B) and (C)
if the provider makes a good faith determination that deviating from the
standards is necessary:
(i) To comply with the
Americans with Disabilities Act (42 U.S.C. §
12101 et seq.);
or
(ii) For clarity based upon the
medium (e.g., mobile device) in which the disclosure will be
presented.
(8)
A provider shall ensure that the width of the columns in the required
disclosure is such that the disclosure does not unnecessarily extend onto
multiple pages. A provider that formats the columns in the required disclosure
such that the ratio between the first, second and third columns is 3:3:7
complies with the requirements of this subdivision.
(9) Where a provider is required or permitted
to provide a "short explanation" under this subchapter, the provider shall
provide an explanation of not more than 60 words.
(10) Each of the cells in the required
disclosures shall be outlined.
(11)
If disclosures are provided to a recipient electronically, the provider shall
include a method for the recipient to submit an electronic signature that
complies with Civil Code section
1633.2,
subdivision (h), and automatic date stamp to comply with subdivision (a)(2) of
this section and provide the recipient with the ability to receive a copy of
the disclosure in a format that the recipient may keep. A format the recipient
may keep includes hard copy disclosures, and electronic documents containing
the required disclosures that the customer can save indefinitely for future
reference.
(12) Except with respect
to sales-based financing, if a provider must make estimates or assumptions to
provide any disclosure required by this chapter, the provider shall:
(A) Base those estimates or assumptions on
the best information reasonably available to the provider at the time of the
disclosure;
(B) State clearly that
any disclosure based upon an estimate or assumption is an estimate by adding
the word "estimate" to the descriptive language of any required disclosure
under this chapter; and
(C) State
clearly any assumptions or estimates used as the basis for the disclosure in
any explanation or description associated with the
disclosure.
(13) When
making the disclosures required by this subchapter, for transactions where the
applicable interest rate adjusts over time and the interest rate applicable for
the entire term of the transaction cannot be calculated in advance, the
provider shall assume that the applicable interest rate is the initial interest
rate for any period when the interest rate cannot be calculated in
advance.
(14) Numerical values,
including but not limited to percentages, dates, and dollar amounts, shall be
expressed numerically, such as "23" and not alphabetically, such as
"twenty-three."
(15) If a provider
issues a disclosure where the amount financed includes funds used to pay down
or pay off other amounts owed by the recipient that may change over time, and
the amount due in connection with those amounts owed changes prior to
consummation of the agreement between the financer and the recipient, the
provider need not provide a new disclosure to the recipient solely because the
amount due in connection with those amounts owed has changed.
(16) A provider may disregard the effects of
the following in making calculations and disclosures:
(A) That payments must be collected in whole
cents.
(B) That dates of scheduled
payments and advances may be changed because the scheduled date is not a
business day.
(C) That months have
different numbers of days.
(D) The
occurrence of leap years.
(17) Notwithstanding subparagraph (a)(16)(A),
any dollar amount disclosed to a recipient shall not be disclosed using
fractions of a cent (ex. $4.025 or $4.02 and 1/2
cents).
1. New section filed 6-9-2022; operative 12-9-2022 pursuant to Government Code section 11343.4(b)(2) (Register 2022, No. 23). Transmission deadline specified in Government Code section 11346.4(b) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.
Note: Authority cited: Sections 321 and 22804, Financial Code. Reference: Sections 22800, 22801, 22802, 22803 and 22804, Financial Code.
Disclaimer: These regulations may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
