Section 916 - General Asset-Based Lending Transaction Disclosure Formatting and Contents(a) Disclosures for asset-based lending transactions, provided in accordance with section 22803 of the code and section 950, shall comply with the following formatting requirements. (1) The provider shall present the required disclosures in a table consisting of nine rows and three columns.(2) All three columns of the first row of the table shall be combined, and within the cell created, the provider shall provide an explanation, in italics, of all assumptions used to calculate the disclosures, and a notice, if applicable, that actual costs may differ substantially from those disclosed. For example: "The calculations below assume you draw [amount calculated in accordance with section 950] at origination, you maintain an outstanding balance of that amount for [length of draw period or "one year", whichever is less], and that the amount owed us is paid off thereafter according to the terms of the contract. Actual costs may differ substantially."(3) The second row of the table shall include only the following information: (A) In the first column: "Funding Provided".(B) In the second column, the amount financed.(C) In the third column, in the order listed and in the same paragraph: (i) "This is the maximum amount of funding [name of financer] will provide."(ii) If the amount financed is greater than the recipient funds: "Due to deductions or payments to others, the total funds that will be provided to you directly if you request the maximum amount is [recipient funds]. For more information on what amounts will be deducted, please review the attached document "Itemization of Amount Financed.""(iii) If any portion of the amount financed will be used to pay down or pay off other amounts owed by the recipient that may change over time, and the amounts owed are known to the provider, the provider may include a short explanation that the amount paid directly to the recipient may change if the amount owed for the recipient's other obligations changes.(iv) If, as a condition of the financing, a recipient's amounts owed to third parties must be paid down or paid off using funds from the amount financed, and an amount owed is not known to the provider, the provider shall also include a short explanation that the amount paid directly to the recipient may change based upon the required disbursements to satisfy other obligations.(4) The third row of the table shall include only the following information: (A) In the first column: "Estimated Annual Percentage Rate (APR)".(B) In the second column, the annual percentage rate calculated in accordance with section 940 of these rules.(C) In the third column in the order listed: (i) "APR is the estimated cost of your financing expressed as a yearly rate. APR incorporates the amount and timing of the funding you receive, fees you pay, and the payments we collect. APR is not an interest rate."(ii) A short explanation of the applicable interest rate or rates for the transaction, if applicable.(5) The fourth row of the table shall include only the following information: (A) In the first column: "Estimated Finance Charge".(B) In the second column, the finance charge calculated in accordance with section 943 of these rules.(C) In the third column: (i) "This is the dollar cost of your financing."(ii) If the contract provides for an adjustable interest rate or rates that are not predetermined by the contract: "The interest rate under your contract will adjust over time, so your actual finance charge may vary."(6) The fifth row of the table shall include only the following information:(A) In the first column: "Payment".(B) The second and third columns shall be combined, and in the resulting cell, the provider shall provide a short explanation of how balances on the account are repaid.(7) The sixth row of the table shall include only the following information: (A) In the first column: "Draw Period".(B) In the second column, the draw period for the transaction.(C) In the third column, a short explanation of the draw period for the transaction.(8) The seventh row of the table shall include no information in the third column, and the remaining columns shall include only the following information:(A) In the first column: "Term".(B) In the second column, the term of the transaction.(9) In the first column, the eighth and ninth rows shall be combined and shall include the following language: "Prepayment".(10) In the eighth row, the second and third columns shall be combined and shall include only: (A) If, at any time during the term of the transaction, prepayment of the outstanding balance due will require the recipient to pay finance charges other than interest accrued since the recipient's last payment, the following statement: "If you pay off the financing faster than required, you still must pay all or a portion of the finance charge, up to $[maximum non-interest finance charge] based upon our estimates."(B) In all other cases, the following statement: "If you pay off the financing faster than required, you will not be required to pay any portion of the finance charge other than unpaid interest accrued."(11) In the ninth row, the second and third columns shall be combined and shall include: (A) If, at any time during the term of the transaction, prepayment of the outstanding balance due will require the recipient to pay additional fees and charges not included in the finance charge, the following statement: "If you pay off the financing faster than required, you must pay additional fees of [amount and description of fees]."(B) In all other cases, the following statement: "If you pay off the financing faster than required, you will not be required to pay additional fees."Cal. Code Regs. Tit. 10, § 916
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.