On November 29th, Working Solutions joined the Responsible Business Lending Coalition in support of SB1235. The Coalition met with Commissioner Jan Lynn Owen and her staff in Sacramento at the Department of Business Oversight which is in charge of implementing the recently signed legislation.
The Coalition consists of Working Solutions, CAMEO, Greenlining Institute, Lending Club, Small Business Majority, Opportunity Fund, and many other CDFIs and responsible lenders. Led by CAMEO’s board and staff, our main objective for the day was to introduce the Commission to our Coalition, share our thoughts on best practices, and make ourselves available for implementation moving forward. The main point for all those involved in this discussion is the use of APR as a standard of measure for capital pricing. Our Coalition strongly believes the transparency that the APR provides is key to informing small business owners about the cost of capital.
The opposing group, Innovative Lending Coalition, comprised of MCA and MCA-type online lenders, would much rather utilize other indicators in order to save their lucrative business models which prey on small business's lack of knowledge. Other implementation issues concerning who the legislation applies to (we advocate for a larger umbrella rather than smaller) and disclosures about prepayment penalties as well as enforcement support were also topics of discussion.
Working Solutions will continue to support our partners in seeing the best implementation of this legislation which could be a powerful safeguard for many small business owners against predatory lenders.