California Consumer Financial Protection Law: commercial financing.

The bill now amends multiple sections of the Financial Code (90000, 90002, 90003, 90005) and adds two new sections (90004.1 and 90009.1), plus an amendment to Education Code Section 94918.5. The original version contained only a single intent statement.

Expands the stated purposes of the CCFPL to include protecting small businesses from harm in connection with financial practices, in manners similar to those undertaken for consumers. Adds a legislative finding that small business owners are often similarly situated as consumers in terms of sophistication and bargaining power.

Amends Education Code Section 94918.5 to clarify that the Department of Financial Protection and Innovation's CCFPL authority applies to covered persons including private postsecondary educational institutions, and that such institutions are not considered 'acting under the authority' of their bureau status when offering financial products.

Starting January 1, 2027, any person offering commercial financing products to California residents must first register with the Commissioner of Financial Protection and Innovation. The department must prescribe registration rules by that date.

Defines 'small business' as a for-profit entity with annual gross receipts of no more than $16 million (biennially adjusted by the Department of General Services). Defines 'recipient' as a small business whose activities are principally directed or managed from California.

Adds detailed definitions for 'commercial financing,' 'commercial financing brokerage services,' 'commercial financing product,' 'commercial financing transaction,' and 'sensitive data' (including bank account numbers, bank statements, credit/debit card numbers, and credit scores).

Prohibits commercial financing providers and brokers from: taking confessions of judgment or powers of attorney before default; including provisions authorizing attachment or garnishment of a recipient's depository accounts; including non-disclosure clauses that limit recipients from disclosing information gained from business activities; and requires brokers to display average and maximum APRs on their websites.

Establishes that unconscionable commercial financing transactions (under Civil Code Section 1670.5) are deemed violations of the CCFPL division and subject to its remedies. Also creates 'substantial assistance' liability for persons who knowingly or recklessly help a covered person violate the law.

Restructures Section 90002 (exemptions) to list specific licenses that exempt persons from CCFPL coverage, and reorganizes Section 90005 definitions with new lettering. Changes 'fiscal committee' vote designation from 'no' to 'yes.'