Section 950 - Asset-Based Lending; Example Transaction(a) The alternative disclosures to a recipient under section 916 shall be made using an example transaction and in accordance with the formatting requirements of section 916. The example transaction shall be based on the proposed agreement governing the actual transaction between the provider and recipient with the following parameters, as applicable: (1) For asset-based lending transactions where the finance charge, annual percentage rate, or term varies based upon the type of advance received, where the provider offers the recipient an agreement that describes the general terms and conditions of the commercial financing transactions that will occur under the agreement, and where the financer provides disclosures based upon an example of a transaction that could occur under the agreement under section 22803 of the code, the provider shall give the recipient a separate disclosure for each type of advance.(2) If the agreement between a financer and recipient permits an advance of funds to the recipient up to and including an approved credit limit, the example transaction used in making the disclosures shall assume: (A) The recipient borrows up to the approved credit limit at origination;(B) The recipient maintains a balance equal to the approved credit limit by reborrowing up to the approved credit limit for a time equal to the draw period or one year, whichever is less; and(C) At the end of the time specified under subdivision (a)(2)(B), the financer is repaid according to the terms specified in the contract.(3) If the agreement between a provider and recipient does not specify an approved credit limit, the example transaction used in making the disclosures shall assume:(A) The recipient has drawn $10,000;(B) The recipient maintains a balance equal to $10,000 by reborrowing up to the approved credit limit for a time equal to the draw period or one year, whichever is less; and(C) At the end of the time specified under subdivision (a)(3)(B), the financer is repaid according to the terms specified in the contract.Cal. Code Regs. Tit. 10, § 950
1. New section filed 6-9-2022; operative 12-9-2022 pursuant to Government Code section 11343.4(b)(2) (Register 2022, No. 23). Transmission deadline specified in Government Code section 11346.4(b) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Note: Authority cited: Sections 321 and 22804, Financial Code. Reference: Sections 22800, 22802, 22803 and 22804, Financial Code.
1. New section filed 6-9-2022; operative 12/9/2022 pursuant to Government Code section 11343.4(b)(2) (Register 2022, No. 23). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.