California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 3 - Commercial Financing Disclosures
Section 940 - Calculation of Annual Percentage Rate
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The annual percentage rate is a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the recipient to the amount and timing of payments made to the provider. For purposes of this subchapter, the annual percentage rate shall be determined in accordance with either the United States Rule method or the actuarial method, as both are set forth in Appendix J, 12 C.F.R. Part 1026 (1-1-21 Edition), and which is incorporated herein by this reference.
(b) The annual percentage rate calculation shall include all finance charges as that term is defined in section 943.
(c) When calculating the required disclosures for commercial open-ended credit plans made pursuant to section 911, the provider shall assume that the recipient borrows the approved credit limit at origination and makes no subsequent draws and that minimum on-time payments are made pursuant to the contract.
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, 22802, 22803 and 22804, Financial Code.
