California Financing Law: Pilot Program for Increased Access to Responsible Small Dollar Loans: monthly maintenance fees.

Existing law, the California Financing Law (CFL) , establishes, until January 1, 2028, the Pilot Program for Increased Access to Responsible Small Dollar Loans, which requires licensees and other entities that wish to participate in the program to file an application and pay a specified fee to the Commissioner of Financial Protection and Innovation. The CFL also requires a licensee to offer, before disbursing loan proceeds under the program, a credit education program or seminar to the borrower that has been previously reviewed and approved by the commissioner or to invite the borrower to a credit education program or seminar offered by an independent third party that has been previously reviewed and approved by the commissioner, as prescribed. This bill would require the Department of Financial Protection and Innovation to make available on its internet website a list of approved credit education program or seminar providers. The bill would authorize a licensee approved by the commissioner to participate in the program to contract for and receive a monthly maintenance fee, as defined, not to exceed $40, as prescribed. The bill would also require a licensee to disclose the amount of the monthly maintenance fee when a consumer applies for a loan under the program. By expanding the crime of violating the CFL, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.