THE ASSEMBLY BANKING AND FINANCE
COMMITTEE IS CALLED TO ORDER
SERGEANT, IF YOU WILL. PLEASE
CALL THE ABSENT MEMBERS. WE DO
NOT HAVE A CORN, BUT WE CAN'T
START AS A SUBCOMMITTEE. WELCOME
TO THE ASSEMBLY BANKING AND
FINANCE COMMITTEE. WHETHER YOU
ARE HERE IN PERSON OR WATCHING
VIRTUALLY I AM GRATEFUL. YOU
HAVE JOINED US HERE IN ROOM 4 44
. TODAY WE WILL ALLOW TESTIMONY
IN PERSON. I ALSO WANT TO NOTE
THAT WE ARE ACCEPTING WRITTEN
TESTIMONY. THROUGH THE POSITION
LETTER PORTAL ON THE COMMITTEE'S
WEBSITE. WITH THAT IT IS TIME TO
MOVE ON TO THE HEARING. AND
BEING THAT WE STILL DON'T HAVE A
QUORUM. WE WILL START AS A
SUBCOMMITTEE AND WE WILL START
WITH ITEM NUMBER TWO, ACTUALLY,
AND THAT IS SB. 666 FILE. ITEM
NUMBER TWO. SENATOR MEN ARE YOU?
ARE YOU HERE? OKAY GREAT
RECOMMENDATION IS DO PASS AS
AMENDED TO THE JUDICIARY
COMMITTEE, SENATOR MEN WHEN
YOU'RE READY, YOU CAN BEGIN WITH
YOUR OPENING STATEMENT.
COMMITTEE MEMBERS JUST WANT TO
SAY I'LL BE GLADLY ACCEPTING.
YOU TWO STAFF HERE FOR PROPOSING
ITSELF. 66 APPROPRIATELY
NUMBERED WILL ADDRESS JUNK FEES
THAT ARE BEDEVILING SMALL
BUSINESSES BY PROHIBITING OR
CAPPING SPECIFIC DRUNK. THESE
PLACED ON SMALL BUSINESSES
DURING THE COMMERCIAL FINANCING
PROCESS. SMALL BUSINESSES WERE
HIT HARD BY THE COVID 19
PANDEMIC AND OVER 40,000 SMALL
BUSINESSES IN CALIFORNIA WERE
FORCED TO CLOSE. MANY OTHERS
TODAY ARE STILL STRUGGLING TO
GET BACK ON THEIR FEET. THESE
CIRCUMSTANCES HAVE PUSHED MANY
SMALL BUSINESSES TO TAKE OUT
LOANS WITH COMMERCIAL LENDING
AND FINANCE COMPANIES JUST TO
STAY AFLOAT. UNFORTUNATELY THESE
LOANS OFTEN COME WITH HIDDEN OR
EXORBITANT FEES. MOST OF THESE
SMALL BUSINESSES HAVE FEWER THAN
10 EMPLOYEES AND DO NOT
NECESSARILY HAVE THE CAPACITY TO
SIFT THROUGH THE FINE PRINT OF
THESE LOANS. AND OF COURSE, THE
DEVIL IS ALWAYS IN THE DETAIL
WHEN IT COMES TO THESE
CONTRACTS. WE NEED SAFEGUARDS IN
PLACE TO MAKE SURE THE LENDING
PROCESS IS STRAIGHTFORWARD,
TRANSPARENT AND DOES NOT COME
WITH SURPRISES. WE'VE IDENTIFIED
FIVE DIFFERENT TYPES OF FEES
THAT ARE EXORBITANT, PROVIDE NO
SERVICE AND OR ARE ANTI
COMPETITIVE. ONE OF THESE
IDENTIFIED FEES IS A CHARGE FOR
PROVIDING STATEMENT OR PAYOFF
LETTERS TO SMALL BUSINESSES
TRYING TO REFINANCE THEIR LOANS
. THESE TYPES OF FEES PUT UP A
BARRIER TO MORE AFFORDABLE
OPTIONS IN OUR ANTICOMPETITIVE.
OTHER FEES LIKE PLATFORM AND DUE
DILIGENCE FEES CAN COST HUNDREDS
HUNDREDS OF DOLLARS EACH AND
PROVIDE NO OTHER CORRESPONDING
CLEAR SERVICE. SP 666 WOULD
ENSURE THESE FEES AND OTHERS ARE
ELIMINATED OR CAPPED AT
REASONABLE AMOUNTS. SMALL
BUSINESSES DESERVE TRANSPARENCY
WHEN EVALUATING THEIR LENDING
OPTIONS, AND THIS BILL WOULD DO
JUST THAT. TESTIFYING SUPPORT OF
THE BILL, I HAVE BIANCA
BLOMQUIST FROM SMALL BUSINESS
MAJORITY. AND HEIDI PICKMAN FROM
THE CALIFORNIA ASSOCIATION FOR
MICRO ENTERPRISE OPPORTUNITY.
WITNESSES MAYBE. YES, THANK YOU.
WITNESSES MAY BEGIN. I SAID
BIANCA FIRST Ó. THANK YOU,
CHAIRMAN GRAYSON, VICE CHAIRMAN
CHAN AND MEMBERS OF THE
COMMITTEE. MY NAME IS BIANCA
BLOMQUIST AND POLICY DIRECTOR
FOR SMALL BUSINESS MAJORITY. WE
ARE A NATIONAL RESEARCH,
EDUCATION AND ADVOCACY
ORGANIZATION THAT EMPOWERS
AMERICA'S ENTREPRENEURS TO BUILD
A THRIVING AND EQUITABLE ECONOMY
. I'M HERE TO TESTIFY ON BEHALF
OF SB 666 TO PROMOTE
TRANSPARENCY FOR SMALL BUSINESS
OWNERS WHEN SHOPPING FOR
COMMERCIAL FINANCING PRODUCTS.
ACCESS TO RESPONSIBLE CAPITAL
REMAINS A TOP CONCERN FOR
ENTREPRENEURS. POLL BY SMALL
BUSINESS MAJORITY FOUND THAT
ACTUALLY EIGHT IN 10, CALIFORNIA
, SMALL BUSINESS OWNERS REPORTED
THEY ARE IN FAVOR OF REGULATING
ONLINE LENDERS TO ENSURE FEES
ARE CLEARLY DISCLOSED TO
BORROWERS. JUNK FEES ARE ANTI
COMPETITIVE AND OFTEN HIGHLY
DISPROPORTIONATE TO THE COST OF
SERVICE PROVIDED THEY MAKE IT
DIFFICULT FOR SMALL BUSINESS
OWNERS TO SHOP AROUND BASED ON
THE ACTUAL COST OF A PRODUCT OR
SERVICE. LENDERS ARE CHARGING
STATEMENT FEES PAYOFF LETTER
FEES THAT THAT PLACE OF
FINANCIAL BARRIER TO A BORROWER
SEEKING TO REFINANCE AN EXISTING
LOAN. THIS PRACTICE IS ANTI
COMPETITIVE AND HAS THE EFFECT
OF COERCING A BORROWER TO STAY
WITH ALONE THEY CANNOT AFFORD.
JUNK FEES ARE NOT ONLY COSTLY TO
BORROWERS, BUT THEY STIFLE
COMPETITION AND ENTREPRENEURSHIP
. COMMERCIAL LENDERS OFTEN
CHARGE LARGE SUMS TO SMALL
BUSINESS OWNERS AS A DUPLICATE
FEES OR FEES THAT DO NOT PROVIDE
A CLEAR CORRESPONDING SERVICE.
EXAMPLES INCLUDE CHARGING A FEE
TO ACCEPT A PAYMENT VIA A CH
AUTOMATIC CLEARING HOUSE. WAR
FEES THAT ARE ADDED ON TOP OF
THE VERGE OF AN ORIGINATION FEES
SUCH AS A RISK ASSESSMENT DUE
DILIGENCE OR PLATFORM FEE, EVEN
THOUGH RISK ASSESSMENT AND DUE
DILIGENCE ARE PART OF THE
ORIGINATION PROCESS BY TACKLING
HIDDEN FEES. POLICYMAKERS CAN
ENSURE SMALL BUSINESS OWNERS ARE
ON A LEVEL PLAYING FIELD WHEN
ACCESSING THE FINANCING. THEY
NEED TO START AND GROW THEIR
BUSINESSES. SB 666 PROTECTS
CALIFORNIA'S ECONOMY. AND
SUPPORTS RESPONSIBLE INNOVATION
AND COMMERCIAL FINANCING IN THE
COMMERCIAL FINANCING
MARKETPLACE. WE ARE GLAD TO SEE
POLICYMAKERS INTRODUCE EFFORTS
TO PROTECT SMALL BUSINESS OWNERS
AS THEY SEE AFFORDABLE,
TRANSPARENT FINANCING, WHICH IS
A CRITICAL COMPONENT TO
MAINTAINING A BUSINESS'S
OPERATIONS AND GROWTH. SB 666
WILL PROVIDE THE PRICE
TRANSPARENCY THAT SMALL BUSINESS
OWNERS DESERVE. AND THANK YOU
FOR YOUR LEADERSHIP ON BEHALF OF
CALIFORNIA SMALL BUSINESS
OWNERS. THANK YOU. AND BEFORE WE
HEAR THE NEXT WITNESS, WE'D LIKE
TO ESTABLISH A QUORUM. SO
SECRETARY IF YOU WOULD PLEASE
CALL ROLL GRAYSON HERE IN HERE.
CHEN CHEN HERE, BARRY CAN OKAY
IN HERE, CERVANTES. DIXON DIXON
HERE, MIKE FONG. GABRIEL.
PETRIE-NORRIS PETRIE-NORRIS
HERE, SORIA. WALDRON WALDRON
HERE, WICKS HERE HERE. WILSON
WILSON HERE. WE DO HAVE A QUORUM
NOW. WE HAVE, UH, BILL MOVED BY
MS WICKS AND SECONDED BY VICE
CHAIR CHEN. PLEASE GO AHEAD. YOU
DO HAVE A MOTION AND A SECOND.
FANTASTIC THANK YOU, CHAIRMAN
GRAYSON, VICE CHAIRMAN CHEN AND
MEMBERS OF THE COMMITTEE. MY
NAME IS HEIDI PICKMAN FOR CAMEO
, CALIFORNIA STATEWIDE NETWORK
OF 400 MISSION DRIVEN
ENTREPRENEURIAL TRAINING
PROGRAMS, SMALL BUSINESS MICRO
LENDERS AND OTHER STAKEHOLDERS
DEDICATING TO HELPING SMALL
BUSINESSES START GROW AND THRIVE
. BIANCA DID A GREAT JOB LISTING
OUT THE ISSUES, SO I'M GOING TO
FOCUS MY TESTIMONY ON A STORY. I
WANT TO TELL YOU ABOUT KELLY AND
ACTUALLY, I'M GOING TO LEAVE HER
NAME OUT OF IT. BUT IF YOU WANT
CONTRACTS, I'M HAPPY. SEND YOU
THE CONTRACTS WITH HER
INFORMATION BLACKED OUT. SHE'S
OWNS A PERSONAL FITNESS FITNESS
BUSINESS IN LONG BEACH. SHE TOOK
OUT A 75 100 MERCHANT CASH
ADVANCE IN A TIME OF DESPERATE
NEED FROM BIDDY ADVANCE TO PAY
HER RENT AND HER INSTRUCTORS HER
ORIGINATION BE WITH $595 ABOUT
8% OF THE LOAN. THAT'S ALMOST
THREE. TIMES THAT OF AN S B A
LOAN. ON TOP OF THAT SHE WAS
CHARGING $50 DISBURSEMENT FEE
FOR SAME DAY DISBURSEMENT OF THE
FUNDS MONTHLY SERVICING FEE FOR
$49 FOR A POINT OF COMPARISON, A
SIMILAR MORTGAGE SERVICING FEE
WOULD BE ABOUT A DOLLAR 60. UM,
AND AN UNSPECIFIED PRE PAYMENT.
THE SP 666 SEATS, TERRAIN AND
HIGH FEES AND FEES THAT DON'T
COME WITH A CORRESPONDING
SERVICE THAT MAKES SOME
COMMERCIAL FUNDING VERY
EXPENSIVE. THIS BILL WILL
SUPPORT SMALL BUSINESSES IN
THEIR QUEST FOR ACCESS TO
RESPONSIBLE, AFFORDABLE CAPITAL
SO THEY CAN GROW SUCCEED AND
BUILD WEALTH FOR THEM THEIR
FAMILIES. AND IN THEIR
COMMUNITIES, WHICH ARE YOUR
COMMUNITIES? WE RESPECTFULLY ASK
FOR YOU. I VOTE THANK YOU VERY
MUCH. THANK YOU VERY MUCH, AND
WE ARE NOW TURNING TO WITNESSES
AND SUPPORT IN THE ROOM. SIMPLY
STATE YOUR NAME, ORGANIZATION
AND POSITION. GOOD AFTERNOON, MR
CHAIRMAN AND MEMBERS. ROBERT
HARRELL, EXECUTIVE DIRECTOR OF
THE CONSUMER FEDERATION OF
CALIFORNIA, WHERE PROUD CO
SPONSOR OF THIS MEASURE, URGED
HER I VOTE. GOOD AFTERNOON CHAIR
AND MEMBERS. MY NAME IS ANDRE
COW WITH THE CALIFORNIA ASIAN
PACIFIC CHAMBER OF COMMERCE AND
SUPPORT. THANK YOU. THANK YOU
AND SEE NO OTHER ONE MORE. MY
NAME IS KATE FISHER. I'M HERE
WITH THE REVENUE BASED FINANCE
COALITION. AND WE SUPPORT THIS
BILL. THANK YOU. THANK YOU VERY
MUCH. SEEING NO OTHER, UH FOLKS
IN SUPPORT. WE WENT OUT TURN THE
OPPOSITION LEADER OPPOSITION
NONE. SO DO WE HAVE ANY
OPPOSITION TO SPEAK IN THE ROOM?
SEEING NONE. WE WILL BRING IT TO
COMMITTEE QUESTIONS OR COMMENTS
FROM COMMITTEE MEMBERS. SEEING
NONE. WE DO HAVE A FIRST AND A
SECOND OR EMOTION IN A SECOND,
SO WE WILL PLEASE. DO YOU WANT
TO PROVIDE A CLOSING STATEMENT?
I RESPECTFULLY ASK YOUR I VOTE.
SENATOR THANK YOU SO MUCH FOR
YOUR BREVITY. MUCH APPRECIATED.
SECRETARY. PLEASE CALL THE ROLL.
THE MOTION IS DUE PASS AS A
MINUTE AND REFERRED TO COMMITTEE
ON JUDICIARY. GRAYSON I CHEN
CHEN. I BARRACK CAN WORK AND I
CERVANTES DICKSON DICKSON. AYE.
MIKE FONG. GABRIEL PETRIE-NORRIS
PETRIE-NORRIS. AYE, SORIA.
WALDRON. WELL, THEN I WICKS I
WILSON. WILSON. I. HAS APRIL.
THE BILL HAS EIGHT VOTES, WE
WILL KEEP THE ROLE OPEN FOR
ABSENT MEMBERS. THANK YOU VERY
MUCH, AND AS THE NEXT AUTHOR
PREPARES TO PRESENT, LET'S. OKAY
SO WE HAVE EMOTION ON CONSENT.
SOME OF THEM ARE WEAK, SECONDED
BY HURRICANE SECRETARY. PLEASE
CALL ROLL. THE MOTION IS DO PASS
AND REFERRED TO COMMITTEE ON
YESTERDAY. THIS SB 446 GRAYSON
HIÆN CHENNAI BARICAN. OKAY, AND
I CERVANTES DIXON DIXON I, MIKE
FONG. GABRIEL. PETRIE-NORRIS
AYE, PETRIE-NORRIS. AYE, SORIA.
WALDRON WALDRON II WICKS I,
WILSON. WILSON. I. CONSENT HAS
EIGHT VOTES. IT PASSES. WE WILL
LEAVE THE ROLE OPEN FOR ABSENT
MEMBERS AS THEY COME IN. SENATOR
GLASER. YOU HAVE S P 33 FILE
ITEM NUMBER ONE. THE
RECOMMENDATION IS DO PASSED
THROUGH THE JUDICIARY COMMITTEE.
AND PLEASE BEGIN WITH WHEN
YOU'RE READY. THANK YOU. CHAIR
THANK YOU. CHAIR. GRAYSON OF
THIS MICROPHONE IS WORKING. UM
IN 2018 THE LEGISLATION SP 12 35
, A LIE AUTHORED TO REQUIRE
FINANCIAL PROVIDERS TO GIVE
SMALL BUSINESS TRUTH AND LENDING
DISCLOSURES, WHICH INCLUDED
EXPRESSING THE TOTAL COST OF
FINANCING AS AN ANNUALIZED RATE
SIMILAR TO WHAT A CONSUMER LOAN
ON YOUR CREDIT CARD. YOU'LL SEE
A RATE IF YOU'RE NOT PAYING IT
OFF IN FULL. THAT'S A CONSUMER
PROTECTION SO YOU CAN SEE THE
RATE THERE IS THERE'S NO NO SUCH
REQUIREMENT FOR SMALL BUSINESS
LENDING. THE DEPARTMENT OF
FINANCIAL PROTECTION INNOVATION
WAS GIVEN THE AUTHORITY TO
DECIDE THE EXACT METRIC THAT
FINANCIAL PROVIDERS WOULD USE.
THEY HELD THREE INFORMAL AND SIX
FORMAL COMMENT PERIODS OVER MANY
, MANY YEARS. I DON'T KNOW IF
THERE'S BEEN SUCH AN EXTENSIVE
COMMENT PERIOD IN OUR RECENT
HISTORY, UH, THE DEPARTMENT
SHOWS THE TIME TESTED ÁP OUR
ANNUAL PERCENTAGE RATE AND
RELEASED A 48 PAGE GUIDELINE
DOCUMENT ON HOW FINANCIAL
PROVIDERS COULD COMPLY WITH THIS
DISCLOSURE. NOTED IN THE IN THE
ANALYSIS OF THE COMMITTEE. LET
ME THANK YOUR STAFF CHAIR
GRAYSON FOR THAT TERRIFIC
ANALYSIS, A STUDY CONDUCTED BY
THE FEDERAL RESERVE FOUND
CONSUMERS LIKE A PR BECAUSE THEY
ARE FAMILIAR WITH IT, AND IT
PROVIDES THEM WITH CRUCIAL
INFORMATION IN A DIGESTIBLE
MANNER. ÁP ARE ALLOWS SMALL
BUSINESS BORROWERS TO COMPARE
APPLES TO APPLES YOU'LL HEAR AND
TESTIMONY FROM THE OPPOSITION
THAT THEY HAVE THEIR OWN WAY OF
TRYING TO PERSUADE SOMEONE DID.
TAKE A LOAN FROM THEM TO TALK
ABOUT HOW MUCH MONEY THEY'RE
GOING TO BE PROVIDING THEM, BUT
THEY'RE NOT REALLY. THEY DON'T
WANT TO PROVIDE IT IN ANY KIND
OF ANNUAL PERCENTAGE RATE,
BECAUSE THAT'S THE APPLES AND
APPLES THAT SMALL BUSINESS NEED
TO BE ABLE TO COMPARE FROM ONE
FINANCIAL OFFER TO ANOTHER. IF
YOU DON'T HAVE THAT CONSISTENT
RATE OF ANALYSIS, YOU CAN EVEN
BE EASILY FOOLED. SP 33 REPEALS
THE SUNSET THAT WAS INCORPORATED
INTO 12 35, ALLOWING FOR THE
CONTINUED DISCLOSURE OF THE
TOTAL COST OF FINANCING TO BE
EXPRESSED AS AN A P R. THE BILL
ENSURES SMALL BUSINESS OWNERS
WHO BORROW MONEY CONTINUE TO
BENEFIT FROM THE PROTECTIONS THE
LEGISLATURE ADOPTED IN 2018. I
KNOW THAT THERE'S SOMETHING TO
BE SOME CONCERNS RAISED AND HAD
WANTED JUST TO MAYBE GETTING IN
FRONT OF IT A LITTLE BIT BY
TALKING TO YOU ABOUT IT. ONE I
MENTIONED THAT THAT THE TIME IT
TOOK TO PREPARE THESE
REGULATIONS AND I MADE THAT
ALREADY IN MY OPENING STATEMENT
TO IS THE FACT THAT UNDER THE
EXISTING REGULATIONS ALL OF A
LENDER HAS TO DO IS PROVIDE A
GOOD FAITH. ESTIMATE THE
REGULATIONS GO INTO GREAT DETAIL
, AND I COULD PUT IT ON THE
RECORD HERE IF NECESSARY. ABOUT
HOW YOU GO ABOUT A GOOD FAITH
ESTIMATE. AND THEY ALSO SPEAK TO
THE ISSUE OF A SAFE HARBOR FROM
LIABILITY IN THE REGULATIONS
THAT I CAN GO THROUGH THAT IN
DETAIL IF YOU WISH TO TRY TO MY
INTENTIONS ORIGINALLY AND
CERTAINLY TODAY ARE NOT TO
CREATE A GOTCHA SITUATION FOR
LENDERS. IT'S COMPLETELY THE
OPPOSITE. WE NEED A ROBUST
FINANCING OPPORTUNITY FOR SMALL
BUSINESS. THAT'S WHAT WE ALL
WANT. FOR SMALL BUSINESS TO
THRIVE, AND I HAVE NO INTEREST
IN AUTHORING LEGISLATION OR
PROTECTING LEGISLATION THAT
CREATES THAT GOTCHA
CIRCUMSTANCES. SO THE
REGULATIONS DO GO INTO WHAT A
FAIR ESTIMATE IS AND WHAT A SAFE
HARBOR IS. SO THAT IF YOU MAKE
YOUR BEST ESTIMATE, AND IT TURNS
OUT NOT TO BE TRUE, THE
REGULATIONS ALLOW YOU TO CHANGE.
IT JUST SAYS YOU HAVE TO HAVE 60
DAYS TO CHANGE IT. DISCLOSE IT
TO THE BORROWER, AND YOU'RE ALL
GOOD AND AGAIN. I'M HAPPY TO
DETAIL THAT IN MORE DETAIL IF
YOU WISH. LET ME JUST SAY THIS
IN CLOSING. FROM THE BEGINNING
OF TIME. THE MANIPULATION OF
MONEY HAS BEEN A HISTORICAL
CHALLENGE. WE'VE HEARD ABOUT
USUALLY RATES. IT'S IN THE OLD
TESTAMENT, THE NEW TESTAMENT,
THE KORAN, YOU CAN LOOK AT SOME
BIBLICAL WRITINGS AND YOU'LL GET
TO THIS ISSUE OF THE
MANIPULATION OF MONEY AND HOW
EASY IT IS TO EXPLOIT PEOPLE.
THE INTENTION OF THE ORIGINAL
BILL IN THIS EXTENSION IS TO
PROVIDE A SIMPLE AND EASY TO
UNDERSTAND METRIC FOR WHAT IT
WOULD COST IF YOU BORROWED MONEY
FROM THIS PERSON OR THIS PERSON
OR THAT PERSON TODAY. IT'S NOT
YOUR YOUR NOT YOUR BANKS DOWN
THE STREET. IT'S ALL ON THE
INTERNET. AND IT'S EASY TO BE
MANIPULATED AS A AS A SMALL
BUSINESS PERSON WHO'S WHO'S NOT
AN EXPERT IN FINANCE. TO
UNDERSTAND WHEN THEY'RE PIZZA
OVEN BREAKS DOWN OR THEIR DONUT
SHOP HAS AN EMERGENCY. WHATEVER
IT IS THAT THEY CAN AT LEAST
COMPARE WHAT DOES BEING OFFERED
SO THEY CAN MAKE GOOD CHOICES
AND NOT BE TAKEN ADVANTAGE OF.
AND WITH THAT I HAVE TWO PEOPLE
TO TESTIFY ON MY BEHALF ON THIS
BILL TODAY. PRESTON MCCASKILL,
WHO'S WITH BLUE BLUE LINE BLUE
VINE. EXCUSE ME, AND HEIDI
PICKMAN, WHO'S WITH THE
CALIFORNIA ASSOCIATION OF MICRO
ENTERPRISE OPPORTUNITY, CAMEO.
UH HUH. THAT REPRESENT A LOT OF
THE RESPONSIBLE LENDING FIRMS,
AND I WELCOME THEIR TESTIMONY AT
THE DISCUSSION OF THE CHAIR.
THANK YOU, SENATOR AND WITNESSES
MAY BEGIN AT YOUR DISCRETION.
HONORABLE MEMBERS OF THE
COMMITTEE. MY NAME IS PRESTON
MCCASKILL. I'M THE VICE
PRESIDENT OF STRATEGIC
INITIATIVES THAT BLUE VINE, A
LEADING PROVIDER OF END TO END
SMALL BUSINESS BANKING SOLUTIONS
, BASED HERE IN CALIFORNIA, AND
I'M HERE TO SHARE BLUE VINE,
STRONG SUPPORT FOR SUBURB FOR
PRESERVING CALIFORNIA'S SMALL
BUSINESS TRUTH AND LENDING
FRAMEWORK BY PASSING SB 33 AS
PROPOSED. SINCE OUR FOUNDING IN
2013 BLUE VINE HAS SERVED OVER
HALF A MILLION SMALL BUSINESSES
PROVIDING OVER $14 BILLION IN
FUNDING AND CURRENTLY EXCEEDS
OVER $700 MILLION IN SMALL
BUSINESS CHECKING DEPOSITS. WE
SUPPORT SB 33 BECAUSE WE BELIEVE
SMALL BUSINESS OWNERS DESERVE
TRANSPARENCY ABOUT THE ABOUT THE
PRICES THEY MAY PAY FOR
FINANCING. AS A FINANCING
PROVIDER. WE WANT TO COMPETE ON
A LEVEL PLAYING FIELD UNDER THE
DISCLOSURE RULES IN PLACE TODAY
WE ARE ABLE TO COMPETE ON PRICE
BECAUSE PROVIDERS ACROSS ALL
FINANCING TYPES HAVE BEGUN
DISCLOSING THEIR PRICES
TRANSPARENTLY AS A P. R S.
DIFFERENT FINANCING COMPANIES
OFFER DIFFERENT KINDS OF
FINANCING. BUT FOR US AND FOR
ALL FINANCING PROVIDERS,
CALIFORNIA'S REGULATIONS PROVIDE
CLEAR INSTRUCTIONS FOR HOW TO
COMPUTE THE ESTIMATED A PR AND
ITS OTHER TERMS. WE UNDERSTAND
THAT AS WE FOLLOW THESE
REGULATIONS IN GOOD FAITH, WE
ARE PROTECTED IN CASES WHERE THE
EFFECTIVE ÁP ARE DIVERGES OVER
TIME FROM THE ESTIMATED ÁP ARE
WE DISCLOSED. THE FBI HAS STATED
THIS IN ITS FINAL STATEMENTS OF
REASONS AT 1.2 0.22. WE URGE YOU
TO PRESERVE TRANSPARENT ÁP OUR
DISCLOSURES ACROSS ALL TYPES OF
FINANCING PRODUCTS. THANK YOU.
THANK YOU, CHAIRMAN GRAYSON,
VICE CHAIRMAN CHEN AND MEMBERS
OF THE COMMITTEE. MY NAME IS
HEIDI PICKMAN AGAIN. WHERE
CALIFORNIA STATEWIDE NETWORK OF
MISSION DRIVEN ENTREPRENEURIAL
PROGRAMS, MICRO LENDERS AND
OTHER STAKEHOLDERS THAT ARE
MISSION DRIVEN TO SERVE THOSE
SMALL BUSINESSES. WE CONSTANTLY
HEAR FROM OUR LENDING MEMBERS
THAT THEIR REFINANCING OR
SOMETIMES TRYING TO REFINANCE
PREDATORY FINANCING THAT THEIR
POTENTIAL BORROWERS YOUR
CONSTITUENTS FOUND ONLINE, THE
LATEST TARGET SPANISH, THE
LATEST TARGET, SPANISH SPEAKING
BUSINESS OWNERS WHO HAVE IDLE
LOANS AND ARE BEING TOLD THEY
NEED A RUSSIAN REFINANCE THEIR
IDOL LOANS OR ELSE THE FEDERAL
TRUTH IN LENDING ACT PROTECTS
CONSUMERS BUT NOT SMALL
BUSINESSES. THAT'S WHY WE WERE
STRONG SUPPORTERS OF SP 12 35,
THE NATION'S FIRST TRUTH AND
LENDING BILL FOR SMALL BUSINESS
PRODUCTS, AND THAT'S WHERE
STRONG SUPPORTERS OF SB 33 BILL
THAT WOULD MAINTAIN CALIFORNIA'S
SMALL STRONG DISCLOSURE LAWS.
AND THAT IS JUST THE DISCLOSURE
OF THE ANNUAL PERCENTAGE RATE.
UM. ÁP ARE ALLOWS APPLES TO
APPLES COMPARISONS THAT SENATOR
GLATER GLASER MENTIONED OF
DIFFERENT FINANCING OVER A
COMMON UNIT OF TIME. IT'S BEEN
IS VERY IMPORTANT. TRUTH IS THAT
MOST SMALL BUSINESS OWNERS MAKE
THEIR FINANCIAL DECISIONS AS A
CONSUMER. A PR IS WHAT MOST
SMALL BUSINESSES ARE FAMILIAR
WITH THROUGH CREDIT CARDS, AUTO
LOANS AND THEIR MORTGAGES. 8
2018 FEDERAL RESERVE STUDY FOUND
SMALL BUSINESS POWER BORROWERS
SINKING FINANCING ONLINE, THEY
FOUND A PR TO MEET BE AMONG THE
MOST USEFUL TERMS FOR
UNDERSTANDING THE COST OF A
PRODUCT. THEY ALSO FOUND THAT
WHEN A SMALL BUSINESS SEASON
NUMBER THAT LOOKS LIKE AN A P R.
THEY THINK IT'S AN A P R EVEN
WHEN IT ISN'T SO IT'S DECEPTIVE
FINANCING PRODUCT CAN LEAD A
SMALL BUSINESS TO FINANCIAL
RUIN, OR EVEN WORSE CLOSURE OF
THE BUSINESS. AND, I GUESS
ALLUDED TO THAT PRODUCT IN MY
LAST TESTIMONY. WE WANT THEM TO
ACCESS GOOD FINANCING AND NOT
FINANCING THAT WILL PUT THEM OUT
OF BUSINESS. UM, WE RESPECTFULLY
ASK FOR YOUR VOTE. THANK YOU TO
THE TESTAMENT FOR WITNESSES. WE
WILL TURN TO ADDITIONAL
WITNESSES IN SUPPORT. SIMPLY
STEP FORWARD STATE, YOUR NAME,
ORGANIZATION AND POSITION. GOOD
AFTERNOON, DANNY KENDALL KAISER
ON BEHALF OF THE CALIFORNIA LOW
INCOME CONSUMER COALITION AND
SUPPORT QUÊ. GOOD AFTERNOON,
GENERAL WARREN EVANS WITH ACCESS
PLUS CAPITAL IN FRESNO SERVING
THE CENTRAL VALLEY, AND WE ARE
HERE FOR SUPPORT. I AM JAREN
THAXTON WITH PACIFIC COMMUNITY
VENTURES AND NONPROFIT LETTER
OUT OF OAKLAND, CALIFORNIA AND
WHERE YOU'RE AND SUPPORTIVE SP
33. GOOD AFTERNOON, ROBERT CAROL
WITH THE CONSUMER FEDERATION OF
CALIFORNIA IN SUPPORT OF THIS,
BILL, THANK YOU. THANK YOU VERY
MUCH ANY OTHER WITNESSES IN
SUPPORT, SEEING NONE. WE WILL
NOT TURN TO LEAD WITNESSES IN
OPPOSITION IF YOU WILL STEP
FORWARD. UH TO THE MICROPHONES
UP HERE? YES, PLEASE. IF WE CAN
MAKE ROOM FOR THE WITNESSES.
THERE YOU GO. AND WITNESSES AND
OPPOSITION MAY START AT YOUR
DISCRETION. GOOD AFTERNOON AND
THANK YOU FOR THE OPPORTUNITY TO
SPEAK WITH YOU ALL TODAY. MY
NAME IS CHRISTINE AHMANSON AND
I'M HERE REPRESENTING A SMALL
PRIVATE CALIFORNIA ASSET BASED
LENDER CAMEL FINANCIAL INC WE
ARE HERE ALONGSIDE SF NET TO
SEEK AN AMENDMENT TO SB 33 TO
SPECIFICALLY INCLUDE SPECIFIC
SAFE HARBOR PROVISIONS TO THE
STATUTES. OVER THE PAST FOUR
YEARS, CAMERA FINANCIAL HAS BEEN
ACTIVELY SHARING OUR CONCERNS
WITH THAT'S SF NET AND OTHERS IN
RESPONDING TO THE SP 12 35
REGULATIONS. THE BILL EXPLICITLY
GOVERNS FOR LOAN PRODUCTS, TWO
OF WHICH ARE TERM LOANS, AND THE
OTHER TWO ARE OPEN CREDIT LINES
, WHICH CAMPBELL FINANCIAL IS
ONE OF THE OPEN CREDIT LINES
BASED ON OUR CALCULATIONS ARE
THEY PRESENTED IN THE
LEGISLATION OPEN ENDED CREDIT
LINES, UNLIKE TERM LOANS CANNOT
PRECISELY CALCULATE A PR OR
TOTAL COST WITHIN ANY REASONABLE
TOLERANCE WHEN COMPARING
ESTIMATED VERSUS ACTUAL THIS IS
BECAUSE TERM LOANS HAVE FIXED
PAYMENTS IN REVOLVERS HAVE
DIFFERENT TYPES ON THAT SIDE ON
THAT SPECIFIC IN THIS BILL, THE
CALIFORNIA FINANCIAL CODE CALLS
FOR CIVIL AND POTENTIALLY
CRIMINAL PENALTIES FOR
VIOLATIONS OF THE CODE, WHICH
INCLUDE DISCLOSURE REQUIREMENTS
OF OUR CALCULATIONS ARE OFF BY
1/8 OF 1% WE ARE IN VIOLATION OF
THE CODE AND SUBJECTED TO
PENALTIES. CAMPBELL FINANCIAL
INC IS OVER 40 YEARS OLD AND IS
A SECOND GENERATION WOMEN OWNED
BUSINESS EMPLOY A SMALL, DIVERSE
STAFF AND THE MAJORITY OF WHICH
ARE ALSO WOMEN. NEARLY ALL OF
OUR BORROWERS ARE CALIFORNIA
BASED BUSINESSES AND EMPLOY
HUNDREDS OF CALIFORNIANS. CAMEL
FINANCIAL IS A DIRECT LENDER,
AND WE DO NOT SELL OR BROKER OUR
LOANS. WE MAINTAIN THE FULL
RELATIONSHIP UNTIL THE COMPANY
CAN TRANSITION BACK INTO
TRADITIONAL FINANCING. THE
INTEREST RATE IS ALWAYS
DISCUSSED AND NEGOTIATED WELL
BEFORE THE CREDIT LINE IS OPEN
AND DUE TO THE SECURE NATURE OF
OUR LOAN LEGAL REVIEW IS
REQUIRED BY OUR BORROWERS PRIOR
TO SIGNING, WE TRULY BELIEVE
THAT OUR PRODUCT HELPS BORROWERS
IN THEIR BUSINESSES REACH THE
NEXT STAGE WITHOUT GIVING UP
EQUITY OR OWNERSHIP SO THEY CAN
CREATE A LEGACY ENTERPRISE. WE
ARE JOB CREATORS AND JOBS.
SUSTAINER XAS. MOST CLIENTELE WE
SERVE ARE UNABLE TO GET
TRADITIONAL FINANCING, LIKE AT A
BANKER AND S B A YOU ARE AWARE
THAT SOME LENDERS ARE NO LONGER
WORKING WITH BUSINESSES WHO NEED
LOANS UNDER THE S B A CAP OF
500,000 BECAUSE THEY DO NOT WANT
TO DISCLOSE A PR. THIS IS LIKELY
TO BE INACCURATE, LIKELY TO BE
ACCURATE AT THE TIME WHEN BANKS
ARE ALSO RESTRICTING LOANS OF
SMALL BUSINESS. A SAFE HARBOR
LENDING LAW WOULD ALLOW ME TO
CONTINUE DOING THAT. LOOK WE
UNDERSTAND THE NEED FOR THAT,
AND CAMEL FINANCIAL IS FULL
FLEDGED FOR THE DISCLOSURE. WE
JUST NEED SOME TYPE OF SAFE
HARBOR THING. IT LEVELS THE
PLAYING FIELD, LIKE OTHERS HAVE
SAID HERE, HOWEVER, THIS IS A
DIFFERENT TYPE OF FINANCING
PRODUCT. WE ARE HOPING THAT YOU
WOULD UNDERSTAND THAT THE A P R
CALCULATION FOR FACTORS AND
ASSET BASED LENDERS OPEN ENDED
CREDIT LINES IS A NEAR
IMPOSSIBLE TASK. AND WITHOUT THE
SAFE HARBOR. SMALL PRIVATE
LENDERS LIKE US COULD POSSIBLY
SUBJECTED TO THESE PENALTIES,
WHICH WE DO FEEL OR IN JUST
FURTHER WITHOUT SOME TYPE OF
PROTECTION. WE ARE EVEN
CONSIDERING WHETHER WE CAN CATER
TO THESE TYPES OF LOANS BELOW
500,000 AND FEAR OF MAKING A
MISTAKE AND INCURRING FINES AND
FEES THAT WOULD PUT US OUT OF
BUSINESS. WE ENCOURAGE SENATOR
GLASER TO AMEND SB 33 JUST TO
INCLUDE THE SAFE HARBOR
PROVISIONS HE'S ALREADY
MENTIONED. HE'S OPEN FOR IT. WE
JUST ARE ASKING FOR A VERY
SPECIFIC LINE ITEM THAT SAYS
THAT TYPE OF STUFF. THANK YOU
AGAIN FOR THIS OPPORTUNITY TO
SPEAK, AND I ANSWERED EAGER TO
ANSWER ANY QUESTIONS YOU MAY
HAVE. THANK YOU. THANKS. ALSO
YEAH. SO, UH, THANK YOU FOR
ALLOWING ME THE OPPORTUNITY TO
SPEAK WITH YOU ALL HERE TODAY.
I'M RICH GUN BREAK THAT THE CEO
OF THE SECURED FINANCE NETWORK
TRADE ASSOCIATION HAS BEEN
AROUND FOR 80 YEARS THAT
REPRESENTS THE INTERESTS OF
SMALL BUSINESS BORROWERS BECAUSE
THEY ARE THE PRIMARY RECIPIENTS
OF THE TYPES OF LOANS THAT ARE
MEMBERS PROVIDE. THIS IS A
SECURED SECURED FINANCE INDUSTRY
IS A $5 TRILLION INDUSTRY THAT
PROVIDES COLLATERALIZED LOANS TO
BORROWERS AND HAS FOR QUITE SOME
TIME WE FULLY SUPPORT DISCLOSURE
, THE RELATIONSHIPS WE HAVE WITH
OUR, UH, CLIENTS TYPICALLY LAST
MANY YEARS AND WITHOUT FRICTION
AND ARE CONCERNED RELATIVE TO SB
33. IS THAT, UH, THE REGULATIONS
AND THE STATUTE DON'T PROVIDE
SUFFICIENT SAFE HARBOR FOR, UH,
AND ERRONEOUS CALCULATION OF A P
R A P R IS NOT A DISCIPLINE THAT
WE'VE USED IN THIS INDUSTRY
BECAUSE THE REALITY IS THE WAY
THAT PEOPLE BORROW WITH THESE
PRODUCTS, ASSET BASED LOANS IN
FACTORING VERY, UH, WITH THE
DAILY CHANGES IN THEIR BUSINESS
CYCLES. UH AND SO WE DID SOME
ANALYSIS THAT SHOWED THAT IF YOU
BORROWED IF WE SET THAT A PR
NUMBER AND PROVIDED AN ESTIMATE
, 12 MONTHS LATER, IT'S
INVARIABLY DIFFERENT BASED ON
WHAT'S ACTUAL DÍAS YEAH. WE HAVE
A MOTION CONTINUE TO CONTINUE.
OKAY UH SO, SO I GUESS I'LL SUM
IT UP BY SAYING THAT WE SUPPORT
WHAT THE INTENTION OF THIS OF
THIS STATUTE AND THE REGULATIONS
ARE, UH, WE FIND IT NEARLY
IMPOSSIBLE TO COMPLY. AND SO
WE'RE SEEKING A SAFE HARBOR THAT
WOULD ALLOW OUR MEMBERS TO
CONTINUE TO LEND 40% OF OUR
LENDERS POLLED IN CALIFORNIA
HAVE SAID THAT THEY WILL NOT
LEND. UH WITH THIS WITH THE
CURRENT REGULATIONS AND STATUTES
IN PLACE, AND THAT'S CLEARLY
ISN'T THE INTENTION OF WHAT
WE'RE TRYING TO DO HERE. WE WANT
TO INVITE CAPITAL INTO THE
MARKET, NOT TAKE IT AWAY. THANK
YOU FOR YOUR TESTIMONY, AND WE
WILL NOW TURN TO OPPOSITION IN
THE ROOM. IS THERE ADDITIONAL
OPPOSITION IN THE ROOM IS SIMPLY
STEPPED FORWARD STATE YOUR NAME.
ORGANIZATION AND POSITION. HI
KATE FISHER WITH THE REVENUE
BASED FINANCE COALITION, AND
WE'RE OPPOSED TO SP 33. THANK
YOU. THANK YOU. SEEING NO OTHER
OPPOSITION IN THE ROOM. WE DO
HAVE EMOTION. ASSEMBLYMEMBER'S
WICKS. AND I WILL BRING IT. I
WILL BRING IT BACK TO THE
COMMITTEE FOR COMMENTS AND
QUESTIONS ARE SIMILAR MEMBER
WILSON. THANK YOU. THIS IS TO
THE AUTHOR. I HAVE A QUESTION
FOR THE AUTHOR, AND THEN A
QUESTION FOR OPPOSITION. SO THE
QUESTION IS OUT THERE AND THE
ORIGINAL BILL THAT YOU
PRESENTED. YOU HAD A SUNSET.
PROVISION WHICH YOU KNOW EXPIRES
NOW, AND PART OF THE REQUEST OF
THIS IS TO REMOVE IT. CAN YOU
TALK ABOUT WHY, UM WHY?
INITIALLY YOU HAD THE FIVE YEAR
SUNSET AND THEN RECOGNIZING THAT
BECAUSE OF HOW LONG IT TOOK, AS
YOU NOTED IN YOUR OPENING
STATEMENT, UM, IT'S ONLY REALLY
BEEN IN EFFECT SIX MONTHS. THANK
YOU THROUGH THE CHAIR. THANK YOU
FOR THE QUESTION. UM YOU KNOW
WHEN THE BILL WAS ENACTED WITH
BROAD BIPARTISAN SUPPORT, IT WAS
NEW. AND SO THAT THAT THAT'S THE
CHOICE WAS TO ALLOW THE
DEPARTMENT TO PROMULGATE
REGULATIONS. UM. AND HAVE
EVERYBODY BE AT THE TABLE FOR
HOW THAT METRICS WAS GOING TO BE
CREATED. UM I THINK THAT THE
REASON THAT AH, IT TOOK SO LONG
WAS BECAUSE OF HOW LONG THEY
BEND OVER BACKWARDS TO TRY TO
DEAL WITH A NUMBER OF THE
OBJECTIONS THAT YOU'VE HEARD
TODAY. BOTH THREE AND FORMAL
CONSULTATIONS OCCURRED IN SIX
FORMAL SIX FORMAL COMMENT
PERIODS EXTRAORDINARY NUMBER,
AND I THINK THAT IT SHOWS HOW
THOUGHTFUL THE DEPARTMENT WAS.
AND WE ALL WERE IN TRYING TO
YEAH. THE RESPONSIVE TO THE
CONCERNS THAT WERE RAISED TODAY.
SO THIS ISSUE OF WHAT'S AN
ESTIMATE OF FAIR ESTIMATE WAS
FULLY EXAMINED AND THE
REGULATIONS TO ADDRESS IT. THIS
ISSUE OF A SAFE HARBOR WAS FULLY
EXAMINED, AND THE REGULATIONS
SPECIFICALLY ADDRESS SAFE HARBOR
PROVISIONS DID NOT CREATE THE
TRAPS FOR LENDERS. SO IT WAS IT
WAS DUE TO THAT COMPREHENSIVE
ENGAGEMENT THAT I THINK, UH, I
THINK WE'RE ALL PROUD OF BECAUSE
WE HAVE A WE HAVE A LAW NOW, IN
EFFECT THAT I THINK IS EXACTLY
WHERE IT NEEDS TO BE, AND IT
PROVIDED THE BALANCES. THAT HAVE
BEEN TESTIFIED TO EARLIER. SO
JUST TO FOLLOW UP THE
MICROPHONE. I'LL GET CLOSER TO
IT. SORRY I MOVED LIKE EVERYBODY
OVER, HUH? JUST TO FOLLOW UP. SO
THE INTENT OF THE FIVE YEAR UM
WENT FOR THE BILL WAS TO REALLY
ALLOW THE REGULATION TO COME
FORTH WITH AS MUCH INPUT AND
EXPOSURE AS POSSIBLE VERSUS
ALLOWING TIME FOR REGULATIONS TO
EXIST TO SEE IF ANY OF THOSE
FEARS CAN BE BORN OUT. I THINK
THAT THAT IS TRUE BECAUSE DURING
THE LEGISLATIVE PROCESS THAT WE
WENT THROUGH YOU KNOW, WE HAD
OBJECTIONS FROM SOME OF THE
SIMILAR FOLKS THAT ARE HERE
TODAY. THEY DIDN'T WANT THE
REGULATION. I MEAN, THERE'S A
REASON THAT ACROSS THE COUNTRY
SMALL BUSINESSES HAVE NONE OF
THESE PROTECTIONS THAT THIS
BUILDING EVENTUALLY IS
PROVIDING. BECAUSE OF THE
OPPOSITION OF PEOPLE WHO COME IN
WITH SCARE TACTICS THAT SAY YOU
CAN'T DO IT. YOU CAN'T DO IT.
YOU'RE GONNA IMPLODE THE
MARKETPLACE. THAT'S WHY IT'S
BEEN A HARD THING TO LEGISLATE
AROUND, AND I THINK IT'S WHY WE
WANTED TO GIVE IT THE TIME TO,
UH, AS AS HAS BEEN DONE TO BE AS
THOUGHTFUL AND INCLUSIVE IN THE
REGULATIONS THAT WERE NOW
OPERATING UNDER OKAY. THANK YOU.
AND THEN THE LAST QUESTION IF I
COULD DO THE OPPOSITION IN
REGARD TO LOOKING AT, UM THE
FACT THAT THE BILL DOES REQUIRE
NOT JUST A PR BUT DOES REQUIRE
TOTAL DOLLAR COST OF FINANCING,
WHICH ALLOWS, UM CONSUMER, THIS
SMALL BUSINESS IN THIS CASE, DID
THOROUGHLY REVIEW AND COMPARE
NOT JUST A PR, WHICH HE SAID,
HAS SOME CONCERNS AROUND AND THE
FACT THAT YOU CAN'T ESTIMATE IT,
OR YOU FEEL LIKE YOU HAVE
DIFFICULTY OR CHALLENGING
ESTIMATED. AND YOU WANTED, UM,
AMENDMENTS RELATE TO SAFE HARBOR
BECAUSE YOU ALSO ALLOW THERE IS
THE ALLOWANCE OF TOTAL COST OF
FINANCING AS THEY EXIST TOGETHER
, NOT ONE OR THE OTHER. UM YOU
DON'T FEEL THAT THAT IS ENOUGH
ACCOMMODATION I'M CONCERNED ARE
NOT CONCERNED, BUT I DON'T
UNDERSTAND THE ARGUMENT IN TERMS
OF THAT THE LEGAL BASIS FOR THE
SAFE HARBOR THE WAY IT EXISTS
NOW IS CREATE A ARE THE BASIS
FOR IT CREATES LIKE A LEGAL
EXPOSURE FOR YOU. MAY I DO IT,
UM, DRIVE LIKE TO LOOK AT YOUR
LITTLE TALKING TO THE MIC. SO
WITH THE IT'S WHAT IT'S REALLY
HAVING TO UNDERSTAND THAT THE
PAYBACK MECHANISM IS DIFFERENT,
SO THAT'S WHERE WE FEEL LIKE AN
ESTIMATE. WE YOU BECOME TO
FURTHER EXPOSED AND AGAIN. I'M
TALKING SPECIFICALLY ABOUT ASSET
BASED LENDERS AND FACTORS. THESE
ARE PEOPLE THAT TAKE BUT THIS IS
NOT YOUR DONUT SHOP OR YOUR
PIZZA SHOP. THESE ARE BUSINESSES
THAT ARE HAVING TO WAIT ON TERMS
FOR THEIR CUSTOMERS TO PAY THEM
. AND IT'S THE WALMARTS THE
AMAZONS, THE ONES THAT ARE
DEMANDING 60 70 80 DAY TERMS FOR
THEM TO ACTUALLY COLLECT THEIR
FUNDS, AND SO IT'S UP TO OUR
BORROWER TO CHOOSE HOW MUCH OF
THAT INVOICE THEY WOULD LIKE TO
TAKE AS AN ADVANCE AND THUS
ATTRIBUTING A CERTAIN PERCENTAGE
TOWARDS THAT, SO THE WAY THE
BILL IS WRITTEN IS I HAVE TO SAY
IF THEY GIVE ME AN INVOICE FOR
$100,000, I HAVE TO GIVE THE
CLIENT $100,000 AND THEY HAVE TO
PAY ON THAT. $100,000 VERSUS IS
THE REALITY WHICH CAN BE WITH A
LOT OF ADVICE AND THE REASON A
LOT OF OUR CLIENTS STAY WITH US
IS AN EXPLANATION ON WHAT THE
OPPORTUNITY COSTS ARE AND THE
VALUE OF BALANCING OUT. THOSE
TYPES OF THINGS ARE TERM LOANS.
YOU CAN'T HAVE THAT DISCUSSION.
IT'S ALL OR NOTHING. YOU HAVE
FIXED RATES. YOU HAVE FIXED TERM
YOU CAN HAVE A FIXED A PR.
YOU'RE GOING TO BE PRECISE AND
ACCURATE EVERY TIME BECAUSE IT'S
ALL SET UP, ASSUMING THERE'S NO
DEFAULTS WITH A REVOLVING LINE
OF CREDIT THAT'S BASED OFF OF
ASSETS LIKE A FACTOR OR AN A B.
L. THERE IS SO MUCH MORE ROOM
FOR HOW MUCH THEY CAN BORROW.
THE BORROWER HAS CONTROL OVER
WHAT THEY CAN TAKE, AND IT'S
VERY IMPORTANT FOR US AS WE'RE
WALKING THROUGH IT AS A SMALL
BUSINESS. WE ONLY OUR PORTFOLIOS
AROUND $10 MILLION AND DO THE
COURSE OF A YEAR. WE PROBABLY
PUT OUT ABOUT 100 MILLION UM,
THEY CAN USE THIS AS A TOOL AND
WHERE WE CAN'T COMPLY IS THAT WE
DON'T KNOW HOW MUCH THEY'RE
GOING TO TAKE. WE ALSO DON'T
KNOW WHEN THE CUSTOMER IS GOING
TO PAY. NOW THEY MIGHT SAY, HEY,
IT'S A NET 45 DAY TERMS. BUT IF
YOU JUST TALK TO ANY OF YOUR
BUSINESS IS ASKED THEM. I MEAN
SMALL BUSINESSES, NOT THE BIG
GUYS WHO CAN REALLY PUSH THEIR
WEIGHT AROUND HOW QUICKLY AND
HOW ON TIME DO THEIR CUSTOMER
PAYS. AND I GUARANTEE YOU IT'S
NOT GOING TO BE VERY CONSISTENT,
AND THAT'S WHY WE CAN'T HAVE AN
ACTUAL A P R. FOR THAT. BUT IT
IS IT IS. ESTIMATE YOU USE THE
WORDS. NO PROBLEM DISCLOSING, I
MEAN ESTIMATE BASED ON WHAT THEY
FINANCED, RIGHT? NO IT'S
ACTUALLY BASED OFF OF THE
WHATEVER WE WRITE A LINE LIMIT
FOR. THAT'S WHAT THE A P R. HAS
TO BE BASED OFF. THE TOTAL COST
OF FUNDS NEEDS TO BE BASED OFF
OF THE TOTAL ONE SIZE. AND OUR
BORROWERS GOING BACK TO YOUR I'M
SORRY TO THE CHAIR OF IT'S OKAY.
I'M SORRY. GO AHEAD. AND SO YOU
JUST WANNA MAKE SURE I'M USING
YOUR EXAMPLE? YOU SAID IF I GOT
AN INVOICE FOR $100,000, THAT
HAS TO BE $100,000. IT CAN'T BE
THAT IT'S $60,000 AND YOU
PROVIDED BY BASED ON THIS PERSON
DOING FOR $60,000. YOU CAN'T
GIVE THEM MEDICINE. IT CAN. YES
BUT WE JUST THE WAY THE LAW IS
CURRENTLY READING. WE HAVE TO
GIVE HIM THE FULL AMOUNT.
$100,000 INVOICE, NOT THE
$60,000 CHOOSE A PORTION OF IT.
ALL RIGHT? I THINK I UNDERSTAND.
THANK TO CLARIFY. IT'S AN
ESTIMATE, RIGHT? OKAY SECOND? NO
NOT YET. DEFINITELY GOING TO DO
A SECOND NOW, OKAY? WE HAVE A
MOTION BY A SIMILAR MEMBER WICKS
AND A DEFINITE SECOND BY
REMEMBER WILSON WITH THAT WE DO
WANT TO DEFINITELY HEAR FROM
VICE CHAIR 10. THANK YOU, MR
CHAIR. UM I APPRECIATE YOUR TIME
AND YOUR INDULGENCE UNDERSTAND
THAT YOU'VE BEEN TALKING TO A
SENATOR GLAZER AND REGARDS THIS
BILL HAS SOME QUESTIONS FOR
RICHER FOR MYSELF. NET.
CLARIFICATION IF YOU WILL. SO AS
UNDERSTANDING, UM THE
REGULATIONS FOR DFT CURRENTLY
THEY DO NOT HAVE A SAFE HARBOR.
THEY DO HAVE A SAFE HARBOR. DO
THEY HAVE A SAFE ROOM? WE DON'T
BELIEVE THAT THEY HAVE A SAFE
HARBOR THAT ADDRESSES OUR
MEMBERS CONCERN. IT'S THERE'S
THERE IS REFERENCE IN THE
REGULATIONS TO THE TERM IS A
SMALL, SAFE HARBOR IS WHAT IT
SAYS SPECIFIC TO BEING WITHIN
THE 1/8 OF 1% TOLERANCE. THERE
IS NO SAFE HARBOR LANGUAGE
PROVIDED FOR IT BEING AN
ESTIMATE AND THAT THE ESTIMATE
MAY AND THAT THE ACTUAL AMOUNT
OF THAT THEY BORROW THE RATE.
COULD BE DIFFERENT FROM THE
ESTIMATE. THERE'S NO REFERENCE
JUST THAT IF I MAY, MR CHAIR, SO
IT SOUNDS LIKE THIS IS YOUR MAIN
POINT OF CONTENTION. TENSION UM
, THE SAFE HARBOR ISSUE IF THE
SAFE HARBOR ISSUE WAS ADDED TO
YOUR PROPOSED AMENDMENTS, WOULD
YOU STILL BE IN OPPOSITION TO
THIS BILL? WHICH YOU HAVE
CONCERNS ABOUT IT? NO WE FEEL
LIKE IF THIS SAFER WE WOULD LIKE
TO COMPLY WITH WHAT'S BEEN
DRAFTED, EVEN THOUGH WE DISAGREE
WITH IT IN PRINCIPLE, BUT WE ARE
CONCERNED, BUT IF WE WERE ABLE
TO GET A SAFE HARBOR THAT WOULD
PROTECT OUR OUR MEMBERS FOR THE
ACTUAL TURNING OUT TO BE
DIFFERENT THAN THE ESTIMATE THAT
WAS PROVIDED. WE WOULD BE NOT IN
OPPOSITION. THANK YOU FOR
CLARIFICATION. ASSEMBLYMEMBER'S
DIXON AND THEN ASSEMBLYMEMBER'S
PETRIE-NORRIS. THANK YOU. I'M
JUST TO FOLLOW UP ON MY
COLLEAGUE ASSEMBLYMEMBER'S
CHEN'S COMMENTS. SO LET'S FOCUS
ON THE SAFE HARBOR. WHAT IS THE
TOLERANCE? I MEAN TO GIVE THAT
PROTECTION THAT YOU NEED? WHAT
WOULD THAT BE? EIGHT OF A
PERCENTAGE POINT OR WHAT IS IT?
WE PRESENTED SOME EXAMPLES OF
WHERE A WHERE ACTUAL CALIFORNIA
BORROWERS IF WE HAD CALCULATED
USING THE FORMAT OF THE
REGULATIONS INTO OUR BEST
EFFORTS, WE CAME UP WITH THE
NUMBERS. WE WENT BACK AND DID IT
RETROSPECTIVELY TO SAY A YEAR
AGO. WHAT WOULD WE HAVE PROVIDED
AS AN ESTIMATE AND CAME UP WITH
NUMBERS AND THEN WE LOOKED AT IT
PROSPECTIVELY A YEAR LATER AND
SAID, WHAT WOULD THE ACTUAL
RATES BASED ON WHAT THEY DID
BORROW AND IT WAS MATERIALLY
DIFFERENT. AND SO IT'S NOT AN
ISSUE FOR US, WHETHER IT'S AN
EIGHTH OF A PERCENT OR IT'S 1%
DIFFERENCE. I THINK THAT THE
ISSUE IS THAT IF WE FOLLOW THE
PRESCRIBED REGULATIONS, AND THE
BORROWER BEHAVIOR IS
SIGNIFICANTLY DIFFERENT SUCH
THAT THE RESULT IS VERY
DIFFERENT. WE DON'T WANT TO BE
SUBJECT TO CIVIL AND POTENTIALLY
CRIMINAL LIABILITY. AND THAT'S
WHAT WE WANT TO MAKE CLEAR.
OKAY, WELL, LET ME FOLLOW UP ON
THAT. SO WHAT WOULD BE THE
PROTECTION FOR THE BORROWER? SO
YOU'RE SAYING THAT THAT RATE
WOULD CHANGE OVER THAT PERIOD OF
THE TERM EXAMPLES THAT WE GAVE?
IT WAS ACTUALLY ABOUT, UH, IT
WENT FROM 30% DOWN TO 18% IN ONE
CASE IN 22% IN THE OTHER WAS
ACTUALLY LESS OKAY? I ASKED THE
AUTHOR SENATOR. SO COULD YOU
KIND OF HELP US DISSECT THE SAFE
HARBOR ISSUE, PLEASE? YOU BET.
AND THANK YOU FOR THE QUESTION.
SO I IN THE REGULATIONS AH, THIS
IS SECTION 901. IT'S
SPECIFICALLY TALKS ABOUT A GOOD
FAITH ESTIMATE AND IT DEFINES IT
AND THEN ON THE ON THE ISSUE OF
THE THRESHOLD THIS IS IN
REGULATION SECTION 955. IT SAYS
THIS A PROVIDER AND FINANCER
SHALL HAVE NO LIABILITY UNDER
THIS SUB CHAPTER FOR ANY
INADVERTENT AIR IN A DISCLOSURE
TO A RECIPIENT THAT DOES NOT
COMPLY WITH THIS SUB CHAPTER, IF
WITHIN 60 DAYS AFTER DISCOVERING
THE AIR, SOMETHING'S CHANGED.
AFTER DISCOVERING THE AIR. UH
HUH. THROUGH THE PROVIDER OR THE
FINANCERS N PROCEDURES AND
PRIOR TO THE INSTITUTION OF AN
ACTION AGAINST THE PROVIDER OF
FINANCER FOR SUCH AIRS. THE
FINANCER OR IT'S A SIGN EASE
NOTIFIES THE RECIPIENT OF THE
AIR. THIS IS FROM THIS IS THE
THIS IS THE REGULATIONS. THIS IS
THE SAFE HARBOR THAT THE
DEPARTMENT AFTER SIX FORMAL
REVIEWS HAVE COME UP WITH TO BE
WAS RESPONSIVE AS THEY COULD, TO
THE CONCERN THAT SOMEONE MAY
BORROW MONEY FOR A 90 DAYS, BUT
ONLY USE IT FOR 60 DAYS AND HOW
THAT TIME CHANGES THE COST OF
MONEY. BUT IF YOU BORROW IT FOR
YOU THINK, 90 DAYS, AND IT LASTS
FOR 180 DAYS. THAT INTEREST RATE
COULD BE DOUBLE WHAT YOU THOUGHT
IT WAS. SO IT PROVIDES ALL THOSE
OPPORTUNITIES FOR THE LENDER IF
THEY'RE BEING RESPONSIBLE
FOLLOWING THE RULES TO MAKE A
GOOD FAITH ESTIMATE AND HAVE NO
LIABILITY, SPEAKING TO THE
EXACTLY TO THE REGULATION FOR
CHANGES THAT THEY DISCOVER AND
HOW MUCH THAT MONEY IS ACTUALLY
GOING TO COST, YES, 60 DAYS TO
MAKE THAT CHANGE AND MAKE THE
BORROWER AWARE OF IT. OKAY. ALL
RIGHT. THANK YOU VERY MUCH.
ASSEMBLYMEMBER'S PETRIE-NORRIS.
THANK YOU. UM, I'M ALSO GONNA
PICK UP ON THIS THREAD AROUND
SAFE HARBOR. SO THE AUTHOR, UM,
SURE THAT HIS GOAL IS TO CREATE
APPLES TO APPLES COMPARISONS,
WHICH I THINK WE ALL RECOGNIZE
IS REALLY IMPORTANT FOR SMALL
BUSINESS POWER CONSUMER, BORROW
OUR EVERYONE, SO I THINK WE'RE
ALL ON BOARD WITH THAT, OR I'M
CERTAINLY ON BOARD WITH THAT
OBJECTIVE. AND THEN YOU ALSO
SAID IN YOUR OPENING COMMENTS
THAT YOUR GOAL IS NOT TO CREATE
A GOTCHA SITUATION, AND I THINK
WHAT? WE'RE NOT WHAT I'M NOT
UNDERSTANDING. I THINK MY
COLLEAGUES AREN'T UNDERSTANDING
EITHER. IS WHAT ABOUT THIS FEELS
LIKE A GOTCHA SITUATION AND WHAT
COULD BE REMEDIED TO ELIMINATE
THAT, BECAUSE THEN IT FEELS LIKE
WHERE YOU KNOW EVERYBODY CAN
WALK. QUITE HAPPY. THAT'S A
GREAT QUESTION. DO YOU WANT TO
ANSWER THE SHALL I GO AHEAD, SO
I DID. THE ISSUE IS ALL IN THE
INABILITY TO PREDICT WHAT THE
ACTUAL BORROWER BEHAVIOR IS
GOING TO BE AND SO WHETHER IT'S
30 DAYS LATER, 60 DAYS LATER, 80
DAYS 200 DAYS LATER. THAT IT'S
NOT ABOUT A MISCALCULATION OF
WHAT THE A P R WOULD BE. IT'S
THAT THE BORROWER'S ACTUAL, UH,
BORROWINGS TRANSLATE INTO A
DIFFERENT A PR. AND AS OUR
LENDERS AND COUNCIL. INTERPRET
THE REGULATIONS AND THE STATUTE.
THERE IS NOT ADEQUATE PROTECTION
FOR THAT VARIANCE IN WHAT THE
ACTUAL ÁP ARE TURNS OUT TO BE.
WOULD THAT AND AGAIN AND NOT TO
SPEAK FOR THE AUTHOR, BUT IT
SOUNDED LIKE WHEN YOU WERE
SPEAKING ABOUT YOUR INTENTIONS
THAT THAT FALLS UNDER THE
UMBRELLA OF A GOOD FAITH
ESTIMATE, AND OUR CONCERN IS
THAT GOOD? THERE IS NO EXPLICIT
SAFE HARBOR FOR A GOOD FAITH
ESTIMATE. IT CALLS FOR US TO
MAKE A GOOD FAITH ESTIMATE. IN
FACT, THE DISCLOSURE SAYS THIS
RATE COULD VARY. BUT THERE'S NO
PROTECTION THAT IF IT DID VARY
THAT WE WOULDN'T BE SUBJECT TO
POSSIBLE TOWARD ACTIONS OR CIVIL
ACTIONS WERE OTHER CRIMINAL
ACTIONS BECAUSE IT'S NOT
EXPLICIT, AND WE JUST SIMPLY
NEEDED TO BE EXPLICIT. IF WE IF
WE'RE TRYING TO GET TO THAT
POINT WHERE WE'RE TRYING TO DO
THE RIGHT THING. FOR THE
BORROWERS AND FOR EVERYBODY
INVOLVED AND DON'T WANT TO
CREATE ANY TRAPS AND LET'S JUST
PUT A SPECIFIC SAFE HARBOR IN
AND THEN EVERYBODY'S EVERYBODY'S
GOT THEIR THEIR NEEDS ADDRESSED.
AT THE RISK OF WAITING TOO MUCH
INTO THE JUDICIARY TERRITORY. I
MEAN, IS THAT SOMETHING THAT YOU
ARE OPEN TO WHAT I SAID TO THEM
WAS THAT, UM I AM OPEN TO
PROVIDING WHATEVER PROTECTION IS
APPROPRIATE TO CREATE THAT SAFE
HARBOR THAT THEY FEEL IS NOT
HERE IN THIS BILL. I DO NOT WANT
TO CHANGE THIS BILL. IT'S JUST
ELIMINATE A SUNSET THAT I'D BE
HAPPY TO AUTHOR A BILL NEXT YEAR
. YOU COULD TRY TO GO WITH THIS
ISSUE OF SOMEHOW IT'S NOT
WORKING. UM WHEN I SUGGESTED
THAT TO THE OPPONENT THAT'S HERE
AT THE TABLE AND THEN FOLLOWED
UP WITH THE SAME QUESTION. THE
VICE CHAIR ASKED JUST A MOMENT
AGO THAT WE REDID RESOLVE THE
SAFE HARBOR ISSUE. WOULD THEY BE
SUPPORTIVE OF THE BILL? I GOT
THE SAME ANSWER, WHICH WAS A NON
ANSWER, WHICH WAS THAT THE SAME
THING THAT WE HEARD BACK FIVE
YEARS AGO, WHICH IS THEY DON'T
LIKE ANY REGULATION IN THIS
SPACE. AND THAT THIS IS NOT
SOMETHING THAT THEY THINK IS
APPROPRIATE FOR THE TYPE OF
LENDING THAT THEY DO. SO I FOUND
IT TO BE DISINGENUOUS TO DISCUSS
THE SAFE HARBOR ISSUE. DESPITE
MY WILLINGNESS TO NOT CREATE
TRAPS AND NOT TO CREATE A
PROBLEM FOR ANYBODY. I WANT
LENDING IN THIS SPACE, BUT BUT I
THINK YOU HAVE TO OWN UP TO THE
FACT THAT THERE IS A SEGMENT OF
THIS COMMUNITY LENDING COMMUNITY
THAT DOES NOT WANT ANY OVERSIGHT
. ANY REGULATION. ANY
DISCLOSURE? AND THEY'RE USING
ANY REASON THEY CAN TO TRY TO
STOP THIS SUNSET FROM FROM FROM
GOING AWAY. FOR THOSE REASONS.
ALL THAT BEING SAID I'M VERY
OPEN TO IT. YOU KNOW, IN YOUR
ANALYSIS TODAY, AND IT WAS AN
EXCEPTIONAL ANALYSIS. THEY
DISCUSS WHAT THE DEPARTMENT HAS
SAID ABOUT THE SAFE HARBOR ISSUE
BECAUSE THEY FELT AS THEY WENT
THROUGH THE COMMENT PERIOD OVER
AND OVER AGAIN WITH SOME OF
THESE OPPONENTS THAT THEY KEPT
ADDRESSING IT, AND I THOUGHT
THEY ADDRESSED THAT THEY THOUGHT
THEY ADDRESSED IT. AND HERE'S
WHAT THEY SAID. AT THE END OF
THE DAY. IT'S IN YOUR ANALYSIS
ON PAGE SEVEN. IT, SAYS THE D F
P. I DECLINES TO ADOPT THIS
CHANGE. THAT THE SAFE HARBOR
THAT THEY WERE SUGGESTING
BECAUSE THE REGULATIONS ALREADY
INCORPORATE SIGNIFICANT
PROTECTIONS FOR PROVIDERS. THE D
F P. I CAN REVIEW THE
EFFECTIVENESS OF THESE
PROTECTIONS AGAINST ENACTMENT OF
THE REGULATIONS AND REASSESS
WHETHER SOME KIND OF GOOD FAITH
SAFE HARBOR STANDARD THAT THEY
CONTINUE TO ASK FOR IS
APPROPRIATE. I COMPLETELY AGREE
WITH WHAT THE DEPARTMENT IS
SAYING HERE. I'M VERY OPEN TO
PROVIDING FOR THAT. IF SOMEHOW
THERE IS WEAKNESS IN THESE
REGULATIONS AS THEY'RE BEING
IMPLEMENTED THANK YOU. A SIMILAR
MEMBER OF OUR CAMP. UM, I JUST
WANNA ADD MY VOICE TO THIS
CHORUS. UM AS IT RELATES TO I
HEARD YOU SAY, SENATOR THAT YOU
THIS IS JUST AN EXTENSION, AND
YOU WOULD DO THAT NEXT TIME AND
I GUESS WHEN WE GO TO EXTEND OR
ELIMINATE A SUNSET, I THINK IT'S
AN OPPORTUNITY FOR US TO ALSO
CHANGE WHAT WE DID IF WE GOT
SOMETHING WRONG, AND SO I DON'T
KNOW THAT WE SHOULD LOOK AT THIS
IS JUST WHILE WE'RE EXTENDING
THE SUNSET, SO LET'S DO THAT IN
A DIFFERENT BILL. I THINK THAT
IT SHOULD BE OUR GOAL IN THIS
BILL TO GET IT RIGHT. AND SO I
GUESS I WOULD ASK THAT YOU BE
OPEN TO NOT JUST VIEWING THIS IN
THAT NARROW WAY AND SAYING,
WELL, WE CAN DO THAT IN A
SEPARATE VEHICLE. IF WE'RE
ALLOWING THE LAW TO CONTINUE, WE
SHOULD DO IT IN A WAY IF WE'VE
LEARNED IN THE PROCESS TO TAKE
THOSE LEARNINGS AND PUT THEM
INTO LAW AT THIS OPPORTUNITY. UM
I DON'T THINK A SAFE HARBOR IS
NECESSARILY AND THAT'S WHAT I'VE
HEARD FROM ALL OF US. I THINK
ALL OF US, INCLUDING YOU,
SENATOR THINK THAT A SAFE HARBOR
IS A REASONABLE THING. I THINK I
STILL REMAIN A TAD BIT CONFUSED.
ABOUT WHAT? UM WOULD BE THE
APPROPRIATE WAY TO DO THAT. AND
SO YOU KNOW, I'LL BE SUPPORTING
THE BILL TODAY, BUT I THINK IT
IS IMPORTANT THAT WE ENSURE THAT
WHERE UM, THE LENDERS ARE MAKING
GOOD FAITH EFFORT TO GET IT
RIGHT. WHICH I HEARD YOU SAYING
THE LANGUAGE. SO IF YOU FEEL
LIKE THAT IS NOT THE CASE, WHICH
AGAIN I'M STILL CONFUSED. WHY?
YOU DON'T THINK IT IS GIVEN THE
LANGUAGE THAT WE'VE SEEN BUT
THAT WE SHOULDN'T AND I KNOW
THIS IS THE SENATOR'S VIEW THAT
HE DOESN'T WANT, UM, SPURIOUS
LITIGATION OF ANY KIND. NOT NOT
ONE OF HIS PRINCIPLES. UM AND SO
, YOU KNOW, I THINK THAT WE CAN
ALL GET THERE AND I WOULD ADJUST
TO DO SO. BUT I THINK IT'S
IMPORTANT THAT WE CONTINUE TO
MOVE THIS FORWARD AND HAVE IF
THERE REALLY IS A PROBLEM, BE
VERY CLEAR OF WHAT IT IS AND WHY
THE SAFE HARBOR IS INSUFFICIENT.
ANY OTHER QUESTIONS, COMMENTS
FROM COMMITTEE MEMBERS. SEEING
NONE. SENATOR GLASER, WOULD YOU
LIKE TO MAKE A CLOSING STATEMENT
? THANK YOU. CHAIR AND THANK YOU
MEMBERS FOR THE THOUGHTFUL
DISCUSSION TODAY. THESE THINGS
THESE THINGS HAVE FINANCING CAN
MAKE YOUR HEAD SPIN. THINK ABOUT
THAT SMALL BUSINESS PERSON OUT
THERE WHO'S IN CRISIS IN MANY
CASES STRUGGLING AND TRYING TO
FIGURE OUT WHAT TO DO ABOUT A
SERIOUS PROBLEM AND WHERE THE
CAPITAL CAN COME FROM TO HELP
KEEP THEIR BUSINESS ALIVE. SO I
APPRECIATE THE COMPLEXITY THAT'S
IN THIS SPACE. I THINK IT SPEAKS
TO WHY THE DEPARTMENT TOOK SO
LONG WITH THESE REGULATIONS. TO
TRY TO GET IT RIGHT. I'M OPEN TO
ALWAYS FINDING WAYS TO MAKE SURE
THAT WE WORK THAT WE DO CAN BE
IMPROVED AND MAKE BETTER. I'M
OPEN TO CONTINUING TO WORK ON
THE SAFE HARBOR ISSUE. I THINK
THE COMMENTS FROM THE MEMBER
FROM ORINDA ARE WELL, WELL TAKEN
, THAT IF WE CAN FIND A WAY TO
DO IT IN THIS LEGISLATION, I'M
OPEN TO DOING THAT. THIS WAS A
TOUGH PLACE TO LEGISLATE FOR
THOSE WHO ARE AROUND BACK THEN.
UM BECAUSE IT'S EASY TO HEAR THE
NAYSAYERS SAYING WHY SOMETHING
CAN HAPPEN, ESPECIALLY WHEN YOUR
GOALS ARE SO MUTUALLY ALIGNED
ABOUT PROVIDING CAPITAL FOR
STRUGGLING SMALL BUSINESS
PEOPLE. BUT I THINK THIS
CONVERSATION TODAY PROVIDES
ENLIGHTENS A LITTLE BIT OF THAT
CHALLENGE THAT WE HAD BEFORE AND
WITH THAT, I RESPECTFULLY ASK
FOR YOUR SUPPORT TODAY. THANK
YOU, SENATOR. AND I DO WANT TO
THANK YOU FOR BRINGING THIS
MEASURE FORWARD, AND FOR ALL THE
WORK THAT YOU HAVE DONE ON
BEHALF OF SMALL BUSINESSES, I
KNOW YOU TRULY CARE ABOUT THE
WORK OF SMALL BUSINESS. I FELT A
LOT OF MEETINGS WITH
STAKEHOLDERS AND AFTER MUCH
DELIBERATION, I HAVE ULTIMATELY
COME TO THE CONCLUSION THAT
GIVING SMALL BUSINESSES MORE
INFORMATION WILL EMPOWER THEM TO
MAKE INFORMED FINANCIAL
DECISIONS. BUT I ALSO BELIEVE
THAT THE A P R DISCLOSURES COME
WITH THE APPROPRIATE FINANCIAL
OR APPROPRIATE CAVEATS, TOO, SO
THAT ANYONE THAT'S READING WILL
UNDERSTAND WHAT THAT NUMBER
ACTUALLY REPRESENTS APPLES TO
APPLES. AS WE'VE SAID THAT SAID
, AS WE HAVE ALL SEEN WITH
TODAY'S DISCUSSION THAT THE A P
R ESTIMATE IS CHALLENGING FOR
SOME LENDERS. AND WHILE THE FBI
DOES GRANT PROVIDERS FLEXIBILITY
AND ROOM FOR ERROR, I DO WONDER
IF THERE'S MORE THAT WE CAN DO
HERE TO GIVE PROVIDERS SOME MORE
LEGAL CERTAINTY WITH THAT. I
BELIEVE A DEBATE AROUND LEGAL
LIABILITY IS MORE APPROPRIATE
FOR THE JUDICIARY COMMITTEE,
WHICH IS WHERE THIS BILL IS
GOING NEXT. SO I HOPE YOU WILL
CONSIDER SOME OF THE COMMENTS AS
YOU STATED IN YOUR CLOSING
COMMENTS TODAY, YOU WILL
CONSIDER THOSE AS YOU MOVE
FORWARD WITH THAT. WE DO HAVE A
MOTION AND A SECOND SECRETARY.
PLEASE CALL THE ROLL. SB 33. THE
MOTION IS DO PASS AND REFERRED
TO COMMITTEE ON JUDICIARY.
GRAYSON AND I, CHEN. CHEN NOT
VOTING. BARRY CAN CAN I?
CERVANTES CERVANTES, I DIXON
DIXON. I. MIKE FONG FONG, I,
GABRIEL GABRIEL, I PETRIE-NORRIS
COULD YOU KNOW I SORIA SORRY, I
WALDRON. WALDRON. I WICKS. AYE,
WILSON. WILSON I YEAH. SENATOR
YOUR BILL HAS 11 VOTES. IT'S OUR
COMMITTEE. THANK YOU VERY MUCH.
EVERYONE THANK YOU VERY MUCH.
TODAY SECRETARY. WE WILL GO BACK
TO CONSENT CALENDAR AND CALL FOR
ROAD FOR MEMBERS THAT WERE
ABSENT. SB 446. THE MOTION IS DO
PASS AND REFER TO COMMITTEE ON
JUDICIARY, CERVANTES CERVANTES?
AYE. MIKE FONG, MY PHONE I
GABRIEL. GABRIEL I SORRY. SORRY.
I COVERAGE. CONSENT CALENDAR IS
OUT WITH 12 VOTES. WE WILL NOW
GO TO FINAL ITEM NUMBER TWO. SB
666. CALL FOR ROLL SB 666. THE
MOTION IS DUE PASS AS A MINUTE
AND REFERRED TO COMMITTEE ON
JUDICIARY. CERVANTES CERVANTES,
I MY SONG, MY PHONE. I GABRIEL.
GABRIEL, I SARRIA SORRY I AND
FINAL ITEM NUMBER TWO SB 66 HAS
12 VOTES IT IS OUT OF COMMITTEE.
WE HAVE NOW. YES
ASSEMBLYMEMBER'S GABRIEL. THANK
YOU. WE HAVE COMPLETED OUR
AGENDA FOR TODAY'S HEARING. WE
WILL BE LEAVING THE ACTUALLY
WE'VE FINISHED OUR ROLE, AND
WITH THAT WE WILL ADJOURN.