Mere days before Halloween, California enacted California Senate Bill 666, imposing a set of restrictions on the fees that commercial financers may charge their small business customers. SB 666 closely follows an August 2023 rulemaking by the California Department of Financial Protection and Innovation targeting unfair, deceptive, or abusive acts or practices (“UDAAPs”) in commercial financing and requiring commercial financers to submit annual reports of their activities to the state. Given California’s history as a bellwether, these developments are an indication that states are not done regulating small business financing.
Mayer Brown’s Legal Update provides further detail for companies that offer commercial financing in California.