Small Business Majority Commends California Lawmakers for Protecting Small Businesses from Predatory Lenders
Expanding the Department of Business Oversight is a step in the right direction, but the measure of its success will be determined by how quickly new regulations are implemented
Sacramento, CA — Today, Small Business Majority’s Vice President of California, Mark Herbert, issued the following statement after Governor Gavin Newsom signed into law a bill to transform California’s Department of Business Oversight (DBO). The legislation will establish the Department of Financial Protection and Innovation (DFPI) and allow for more robust oversight of commercial financing companies that engage in unfair, deceptive or abusive acts or practices (UDAAP) toward small businesses.
“In the absence of federal laws prohibiting commercial predatory lending, for years, bad actors have had license to disguise the true price and terms of their products and prey on small businesses. By giving the DBO the authority to develop regulations for commercial lenders, California lawmakers have sent a clear message: ‘Our state will not tolerate abusive behavior from financial companies trying to turn a quick buck at the expense of our small business job creators.’
However, progress cannot stop here. The department now must move quickly to implement these regulations. The COVID-19 crisis has laid bare what we have witnessed for years: businesses owned by people of color and other vulnerable businesses are disproportionately left behind in lending. Each day that these regulations are not implemented the most vulnerable business owners will still be susceptible to the practices of predatory lenders.
By expanding its oversight, California has set the benchmark for the federal government and others to follow. If implemented quickly, our state’s four million small business owners will be better protected during the COVID-19 recovery and in the years to come.”
About Small Business Majority
Small Business Majority is a national small business organization that empowers America's diverse entrepreneurs to build a thriving and inclusive economy. We engage our network of more than 70,000 small businesses and 1,000 business and community organizations to advocate for public policy solutions and deliver resources to entrepreneurs that promote equitable small business growth. Our deep connections with the small business community along with our scientific research enable us to educate the public about key issues impacting America’s entrepreneurs, with a special focus on advancing the smallest businesses and those facing systemic inequalities. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.