NINETY ONE FOUR HOURS S. B.
TWELVE THIRTY FIVE SENATOR
GLAZER WHEN YOU'RE READY YOU CAN
BEGIN YOUR PRESENTATION.
THANK YOU VERY MUCH MISTER
CHAIRMAN AND MEMBERS.
OF WE DO HAVE CUANDO LET'S --
MADAM SECRETARY PLEASE STOP
SUPPORT.
SENATOR BRADFORD PEAR BRADFORD
HERE BIDAK [inaudible]
RIGHT BACK HERE GAINES.
GAINES HERE GALGIANI.
GALGIANI HERE PUESTO.
LARA [inaudible]
PORTANTINO.
IRAQ QUORUM IS EXTENT HAS BEEN
ESTABLISHED SENATOR GLAZER WHEN
RAY THANK YOU MISTER CHAIRMAN
AND MEMBERS THAT WE GATHER AT A
SPECIAL MOMENTS TONIGHT WITH
THAT HISTORIC OPPORTUNITY BEFORE
US.
I WHERE HERE THANKS TO THE WORK
OF A BROAD CROSS SECTION OF
CALIFORNIANS.
STARTING WITH THIS COMMITTEE IN
APRIL.
ANDCLOETE MUCH OF THE SMALL
BUSINESS LENDING COMMUNITY SMALL
BUSINESS ADVOCATES AND CHAMPIONS
OF ECONOMIC OPPORTUNITY.
THE WORK GOD THAT WORK HAS
PRODUCED A BILL THAT WOULD MAKE
CALIFORNIA THE FIRST STATE IN
THE COUNTRY.
GIVES SMALL BUSINESS OWNERS
THAT'S WHAT THIS IS ABOUT.
GIVE SMALL BUSINESS OWNERS THE
SAME TRUTH IN LENDING
PROTECTIONS THAT CONSUMER
BORROWERS HAVE ENJOYED FOR MORE
THAN HALF A CENTURY.
THIS BILL CLOSELY FOLLOWS
RESEARCH BY THE US FEDERAL
RESERVE BANK.
AND RECOMMENDATIONS FROM THE
CONFERENCE OF STATE BANKING
SUPERVISORS.
IT WOULD REQUIRE LENDERS AND
OTHER FINANCE COMPANIES. TO
PROVIDE CLEAR AND CONSISTENT
DISCLOSURES TO SMALL BUSINESS
OWNERS WHEN THEY OFFERED HIM
FINANCING AND WHEN THEY CLOSE A
DEAL.
THIS INFORMATION WOULD HELP
SMALL BUSINESS OWNERS UNDERSTAND
THE COST.
AND THE CONSEQUENCES OF THE
FINANCING OPTIONS AVAILABLE TO
THEM IN THE COMMERCIAL LENDING
MARKET.
WHEN THIS BILL WAS LAST IN THIS
COMMITTEE YOU ASKED ME TO
ADDRESSCERTAIN ISSUES INVOLVED
IN DISCLOSING AN ANNUALIZED RATE
OR AN ESTIMATED RIGHT?
I TOOK THAT DIRECTION HARD AND
THE BILL BEFORE YOU NOW DOES
EXACTLY THAT.
THE BILL NO LONGER SPECIFIES
WHICH METRIC TO BE USED FOR
DISCLOSING AN ANNUALIZED RATE.
INSTEAD IT DIRECTS THE
DEPARTMENT OF BUSINESS OVERSIGHT.
TO DETERMINE THE BEST METRIC
AFTER A PROCESS THAT WILL
INVOLVE EXTENSIVE CONSULTATION.
WITH THE MANY STAKEHOLDERS
CONCERNED WITH THIS ISSUE.
IMPORTANTLY THE BILL TAKES THE
SUGGESTION FROM THE COMMITTEES
ANALYSIS IN APRIL AND PUTS THEM
IN THE STATUTE.
VERBATIM AS REQUIRED. FOR THE
DEPARTMENT TO USE IN CHOOSING
THAT METRIC.
IT'S CHANGE REMOVE MUCH OF THE
OPPOSITION TO THE BILL.
AND BROAD SUPPORT FROM DOZENS OF
LENDERS AND SMALL BUSINESS
ADVOCATES.
INCLUDING THE NFIB CALIFORNIA
SMALL BUSINESS ASSOCIATION.
AND SMALL BUSINESS CALIFORNIA.
THE BILL PASSED THE ASSEMBLY
THIS MORNING.
ON OVERWHELMING BIPARTISAN VOTE
SIXTY NINE VOTES IN FAVOR.
PASSAGE YOU CONSIDER TODAY AND
AND GIVE IT YOUR MOST POSITIVE
CONSIDERATION HAD DESCENDED ON
TO THE FLOOR BUT WITH ME AS PAUL
DONAHUE.
REPRESENTS THE OPPORTUNITY FUND
AND THE RESPONSIBLE LENDING
COALITION [inaudible]
THANK YOU [inaudible]
THANK YOU.
ANY QUESTIONS BY COMMITTEE
MEMBERS.
YES WHO SENATOR DANCE.
WONDER IF MAYBE YOU COULD HELP
ME.
I CLARIFY SOME QUESTIONS THAT
HAVE COME UP.
ON THIS DISCLOSURE FORM
[inaudible]
AND HOW THAT WOULD BE PRESENTED
BECAUSE WE'VE GOT A VARIETY OF
DIFFERENT TYPE OF FINANCE
PRODUCTS --
SOME THAT ARE OF VERY UNUSUAL
THAT --
MIGHT BE BASED ON REVENUE OF A
PERCENTAGE OF REVENUE --
FOR A BUSINESS SO.
VERY HARD --
DETERMINE THE EXACT COSTS --
OR MEDIA --
A FEE PER TRANSACTION THAT THAT
THEN PAYS FOR THE LOAN --
IF YOU THE SIX BAND ON THAT AND
HOW HOW THAT WOULD BE DETERMINED
THAT YES SENATOR THROW IN THE IN
THE LEGISLATION --
IT SPECIFIES.
HOW ONE DETERMINES --
THIS ANNUALIZED RATE.
I ADDED IT SAYS IN IN IN THE
BILL.
AYE HOW IT'S TO BE CALCULATED --
AND SPECIFIES AYE AND REQUIRES
THE DEVIOUS SPECIFY THE ACCURACY
REQUIREMENTS THE TOLERANCE
ALLOWANCES FOR THE CALCULATION.
TYPES OF FEES AND CHARGES TO BE
INCLUDED.
SO IT GIVES THEM THE DOES THE
DISCRETION WITHIN EACH OF THESE
DIFFERENT FINANCING CATEGORIES.
TOO UP PUT PUT FORWARD AFTER
CONSULTATION WITH THE
STAKEHOLDERS.
THE FAIR DISCLOSURE IN THAT IN
THAT CASE.
OKAY SO IF I HAD.
THE PLAYERS BASED ON ACCOUNTS
RECEIVABLE OF CASH FLOWING IN
AND I GIVE A CERTAIN PERCENTAGE.
OF THAT TO SOMEONE WHO WOULD
LEND ME MONEY.
THERE WOULD BE SOME SORT OF
DETERMINATION ON TRYING TO
FIGURE OUT WHAT THE ACOSTA THAT
MONEY WOULD BE.
RIGHT BECAUSE THE GUY THAT THAT
ACCOUNTS RECEIVABLE CAN CHANGE
IN TERMS OF WHAT THAT AGREEMENT
IS.
OUT WE ARE RECOMMENDING THAT IT
BE DONE BASED ON A MASTER
AGREEMENT WHATEVER THAT STANDARD
THAT WAS SET IN THE MASTERS
AGREEMENT WOULD BE WHAT WOULD BE
DISCLOSED UNDER THIS BILL
WOULDN'T BE ANY LIABILITY ISSUE
ON THE PART OF THE LENDER --
IN TERMS OF DISCLOSURE OF THIS
INFORMATION IF FOR SOME REASON
IT WAS NOT ACCURATE.
BUT THEY BE HELD LIABLE WELL I
THINK THAT'S EXACTLY WHAT WHICH
WERE TRYING TO DO WITH THE BILL
THAT'S BEFORE YOU IN THAT WE
WANTED.
TO GIVE THE LET NO ONE WANTS TO
CREATE A EXPOSURE TO THE LENDER
THAT'S NOT MY INTENTION HERE.
UP OUT WE WANTED TO WE DON'T DO
ANYTHING TO THIS IS LENDING
MARKET THAT'S THE OPPOSITE OF
WHAT WE WANT TO DO --
SO WE WE DO --
BY HAVING THIS STAKEHOLDER
PROCESS WITH THE VIDEO AND
ALLOWING D. V. O. TO LISTEN AND
TO PROVIDE CLEAR GUIDANCE TO
LENDERS I THINK YOU'RE GOING TO
AVOID THAT EXACT CONCERNED THAT
SOMEHOW --
THEY DIDN'T KNOW EXACTLY WHAT
THE LEGISLATURE INTENDED WITH A
VERY PRESCRIPTIVE.
STANDARD THAT COULD BE AT THAT
WAS ORIGINALLY IN THE BILL.
I AM SO I THINK THAT THE WAY
THIS IS --
PUT FORWARD TO YOU TODAY IS
GOING TO PROVIDE BETTER
PROTECTIONS BECAUSE I DON'T WANT
LENDERS TO BE CONFUSED I DON'T
WANT THEM TO A TWO THEY DON'T
ADMIT WE WANT TO MISLEAD THEY
DON'T WANT TO MISLEAD.
AND WANT TO PROVIDE THE LEGAL
PROTECTION SO THAT AS LONG AS
THEY FOLLOW THERULES IS LAID
OUT -- THAT
THAT THEY'RE PROTECTED AND I I
DON'T WANT ANYTHING DIFFERENT
AND IT REALLY IS SOMEHOW THAT
ERE TO OCCUR.
I WOULD BE RIGHT BACK UP BEFORE
YOU I TRIED IT ADJUSTING CHANGE
THAT ONE OF THE THINGS THAT YOU
ASKED.
FOR IN THIS BILL IS A SUNSET
THAN THIS BILL DOES HAVE THE
SUNSET -- AT
SO THAT IF THERE'S ANY ISSUES
THAT COME ABOUT.
I UNINTENDED CERTAINLY BY ON MY
PART TO DO ANYTHING TO AFFECT
THE LENDING MARKETPLACE I WILL
BE BACK UP RIGHT IN FRONT OF YOU
DID TWO CORRECTED IMMEDIATELY.
I REALLY LIKE THE IDEA OF
DISCLOSURES SO YOU HAVE
TRANSPARENCY. FOR ANY SORT OF
BUSINESS TRANSACTION THAT MIGHT
INVOLVE A LOAN THAT YOU WOULD.
YOU KNOW WHAT THOSE OBLIGATIONS
ARE GOING TO BE WHAT THE
INTEREST RATE WOULD BE OR WHAT
THE TOTAL COST WITH THE FEE.
WOULD BE SO --
THANK YOU FOR ALL OF YOUR
EFFORTS NOT BE LISTENING --
FOR MORE TESTIMONY THANK YOU.
NEED TO SNOW QUESTIONS OR
COMMENTS FROM COMMITTEE --
MISTER GLAZIER I APPRECIATE YOUR
EFFORT HERE --
AND YOU HAVE AT HERE TO EARTH
CAME CLOSE TO HEARING TO A LOT
OF WHAT WE DISCUSSED WHEN THE
BILL WAS HEARD EARLIER THIS YEAR
IN MY COMMITTEE OR THAT THIS
COMMITTEE I SHOULD SAY.
AW I'M DISBURSING NOT AT A
POSITION TODAY TO MAKE A
RECOMMENDATION ON THIS SHOW ARE
AYE I WILL BE STAND OUT THE BILL
BUT I IF THERE'S ANY OTHER
QUESTIONSBY COMMITTEE MEMBERS
BUT I'M NOT PREPARED TO MOVE
FORTH ON THE I THOUGHT OH I'M
SORRY YEAH YOU --
I I APOLOGIZE I'M TRY TO GET OUT
HERE -- GUY
WITNESSES IN SUPPORT.
THANK YOU MISTER CHAIRMAN PAUL
DONNIE ON BEHALF OF OPPORTUNITY
FUND.
RESPONSIBLE BUSINESS LENDING
COALITION AND SMALL BUSINESS
CALIFORNIA.
WE'RE SUPPORTING THIS BILL --
WE THINK IT'S A VERY REASONABLE
APPROACH AND HAS BEEN WORKED ON
AND NARROWED THROUGHOUT THE
PROCESS --
EACH LENDER IN OUR COALITION.
DISCLOSES EVERYTHING THAT'S
CALLED FOR IN THIS BILL AND THEN
SOME -- YOU
WE THINK SMALL BUSINESSES.
IT'S BEEN THE EXPERIENCE OF
THOSE IN THE COALITION ALSO THAT
THE IT IS OF OF WHOM THEY DEAL.
APPRECIATED THEY PREACH HATE
ALWAYS DISCLOSURES THEY LIKE
KNOWING WHAT IT'S GOING TO COST
[inaudible]
AND WITH THIS MEASURE I THINK
THAT.
IT BE MOVES TOWARDS A
STANDARDIZED DISCUSSION HERBS
STANDARDIZES CLOSURE.
ACROSS ALL PRODUCT LINES IN.
ARE THE ALL SMALL BUSINESSES
THAT I REPRESENT HERE ARE VERY
MUCH IN SUPPORT OF ALL THAT'S WE
ARE DRIVE THOSE GREAT.
THE SHOW WITNESSES SUPPORT.
MISTER CHAIR MEMBERS STILL
SLOPER FOR THE AUTOMATIC FINANCE
CORPORATION WE APPRECIATE THE
WORK SENATORS TOWN.
OF WE WERE CONCERNED OF FIRST
AND HE'S INVENTED A VERY GOOD
BILL WE'VE WE'VE SUPPORT THANK
YOU THANK YOU HOW WITNESSES IN
OPPOSITION.
GOOD EVENING MISTER CHAIR
CENTERS GOOD EVENING ALEX ALLEN
IS REPRESENTING THE SMALL
BUSINESS FINANCE ASSOCIATION --
BACK IN APRIL YOU DID INSTRUCT
MY CLIENT TO WORK OUT.
SOME SORT OF AGREEMENT WITH THE
SENATOR --
VINCE DO MOVE THE BILL FORWARD
AND AND WE DID AND WHEN WE
WORKED OUT SOMETHING IN THE BILL
MY CLIENT DID SUPPORT THE
MEASURE.
UNFORTUNATE COUPLE WEEKS GO THE
BILL WAS AMENDED AREN'T ANY
CREATED UNCERTAINTY THE PREVIOUS
VERSIONS OF THE BILL HAD NOT
EVER AGREED WITH THE POLICE HAD
A CALCULATION IN THE BILL THAT
YOU COULD ACTUALLY FOLLOW FIVE
DIFFERENT STEPS IN THE
PERCENTAGE OF POP OUT.
THIS WOULD DISTRICTS TOO MUCH
UNCERTAINTY IT DOESN'T INSTRUCT
DB ó. TO CONSIDER FIVE FACTORS
WHEN DETERMINING WHAT THE
ANALYZE RAIDERS BUT IT'S NOT
EXCLUSIVE TO THOSE FIVE FACTORS
THAT COULD BE FIFTY OTHER
FACTORS AND SO.
THAT'S THE THING THAT CONCERNS.
MY MEMBERS IS THAT THEY'RE ON
THE WHAT THAT'S GOING TO BE THAT
COULD BE A PR WHICH WILL BE.
VERY FOR BOARD WITH SOMETHING
CLOSE TO THAT.
THIS IS THE FIRST TIME THIS HAS
BEEN ATTEMPTED PALM ADDICT
CENTERS ON A LOT OF PEOPLE'S
ATTENTION AND I THINK ANYBODY
SUPPOSED TO A DISCLOSURE.
THAT JUST WANT SOMETHING THAT
WORKS PSALMS RIGHT BUT IT'S
THEIR RIGHT NOW.
FISHER WITNESSES IN OPPOSITION.
THANK YOU CHAIRMAN SCOTT SAT ON
BEHALF OF THE COMMERCIAL FINANCE
ASSOCIATION WERE IN OPPOSITION
GREAT THANK YOU EXPLETIVES.
A GOOD EVENING MISTERCHAIRMAN
AND MEMBERS OF OUR ON BEHALF OF
EXPANSION CAPITAL MEMBER OF CFC
IN OPPOSITION [inaudible]
THANK.
BABY CAN THOU THE COMMERCIAL
FINANCE COALITION IN OPPOSITION
THANK YOU.
GREAT I CAN BRING IT BACK TO
COMMITTEE --
ANY ADDITIONAL QUESTIONS OR
CONCERNS WERE COMMITTEE HEARING
UNSEEN NONE MISTER GLAZIER
CENTER GLACIAL TO LIKE CLOSE
THAT THANK YOU MISTER CHAIRMAN I
THINK IF YOU LOOK AT THE LIST OF
SUPPORTERS WILL SEE.
AND COMPARE TO WHAT IT WAS CELL
LAST APRIL SEE A COMPLETE CHANGE.
AT THAT THE VAST MAJORITY OF
THOSE INVOLVED IN THE COMMERCIAL.
OF FINANCING WORLD OF FIVE COME
OUT IN SUPPORT OF THIS BILL.
AS A REASONABLE STEP FORWARD IT
DOESN'T.
INCLUDE REGI IT TO IT'S NOT A EL
LICENSING SCHEME A REGULATORY
SCHEME IT'S A VERY SIMPLE
DISCLOSURE.
AND THAT IT'S A CONSUMER
PROTECTION A SMALL BUSINESS
PROTECTION THAT'S THAT'S ALL
THIS MEASURE WAS ATTEMPTING TO
DO WAS.
TO WAS TO DO THAT AND IT'S
ALWAYS DIFFICULT TO FIGHT A LOT
OF THESE PEOPLE THAT ARE.
LENDING MONEY BECAUSE THEY ONE
OF THE OTHER ONE A LANDED ON
THEIR TERMS IN A LOT OF PEOPLE
THAT ARE IN THE SMALL BUSINESS
WORLD TODAY THERE --
THERE I KNEW THAT RENTS THEY
THEY THEY DON'T HAVE THE
FINANCIAL EXPERTISE AND THEY GET
TAKEN ADVANTAGE OF HONESTLY THEY
GET TAKEN ADVANTAGE OF BECAUSE
SOMEONE SAYS HEY.
YOU NEED SOMETHING FOR THAT
PIZZA OVEN THAT BROKE DOWN YOU
WANT FIVE THOUSAND DOLLARS
LISTEN HERE'S THE DEAL FOR YOU.
AND I HAVE NO PROBLEM WITH THEM
OFFERING THAT DEAL IN MOST OF
THESE BY THE WAY ARE DONE ON THE
INTERNET.
BUT ALL I WON IS THAT SMALL
BUSINESS PERSON TO BE ABLE TO
UNDERSTAND IT AND TO BE ABLE TO
COMPARISON SHOP.
SO THAT THEY CAN GO TO ANOTHER
LENDER AND AND AND UNDERSTAND
WHAT THOSE TERMS ARE COMPARED TO
THE OTHER LANDER AND MAKE THE
BEST CHOICE THEY CAN MAKE.
BECAUSE THEY CAN'T MAKE TOO MANY
MISTAKES WHEN IT INVOLVES HOW
MUCH MONEY THEY HAVE TO TAKE OUT
OF THE TILL.
THE PAYOFF THAT LOAN AND THAT'S
ALL THIS BILL DOES DISCLOSURE.
AND THERE'S A REASON WHY THERE'S
NO DISCLOSURE IN ANY STATE IN
AMERICA TODAY IN COMMERCIAL
LENDING BECAUSE THE POWER OF
THOSE WHO HAVE THE MONEY.
DID NOT WANT TO TELL ALL THAT
THEY SHOULD TELL AND THAT'S NOT
GOOD AND THAT'S NOT HEALTHY.
AND THAT'S WHAT THIS BILL IS
TRYING TO ACHIEVE IN A VERY
MODEST WAY IT'S IT'S MANEUVERED
TO A VERY DIFFICULT COURSE TO
THIS LEGISLATURE.
AND IT COMES YOU TODAY UP WITH
BROAD SUPPORT FROM THE INDUSTRY
AND WITH BIPARTISAN SUPPORT I
WASN'T EASY TO DO AND THAT THERE
IS A AND I THINK THAT.
I HOPE THAT YOU WILL CONSIDER
PUTTING OVER THE LINE AND BRING
IT TO THE FLOOR THE OF THE
SENATE THANK YOU.
Q. PROTESTS MONEY AS I STATED
I'M NOT A POSITION I MAKE A
RECOMMENDATION JUST TO THE
LATENESS OF THE HOUR AND I
BELIEVE.
YOUR INTENTIONS ARE WELL BUT I
JUST NOT COMFORTABLE AT WHAT
WE'RE TRYING TO WERE WE ARE TO
DAY SO.
IF THERE'S A MOTION BY IN MY
COLLEAGUES I WOULD WELCOME THAT
BUT NOT.
THEN MOVE VISOR GANGS AND
SECRETARY PLEASE CALL THE ROLL
[inaudible]
SENATOR BRADFORD [inaudible]
NOPE.
BRADFORD NAILED ACT.
BY ACT NO GAINES [inaudible]
GAINES I GALGIANI.
GALGIANI AYE WESO [inaudible]
LARA [inaudible]
PORTANTINO [inaudible]
PORTANTINO I THREE THROUGH
[inaudible]
TO SENATE.
CAN I PUT THAT BILL ON CALL.
YEAH GRINGO OF STUFF IN CALLING
NIGHT -- I
DON'T KNOW FROM MY COLLEGE AND
SAY [inaudible]
NO.
LATELY I'VE GOT YEAH WE HAVE
SOME MILES COMING BACK AND
NEEDING THIS COMMITTEE ROOMS
FILLED.
I BELIEVE THE LACK OF THAT
MEASURE FILLS [inaudible]