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Committee advances AB 1166 to extend debt-settlement standards and a private right of action to small-business loans
Summary
AB 1166, which would extend California's debt-settlement standards to commercial financing and provide a private right of action (statutory damages up to $5,000 cited in committee exchange), passed the Assembly Banking and Finance Committee after testimony from lenders and industry groups.
The Assembly Banking and Finance Committee moved AB 1166 out of committee with a do-pass recommendation after testimony from lenders, fintech representatives and consumer-advocacy coalitions. Supporters said the bill brings California's existing consumer debt-settlement standards to commercial financing, setting disclosure and conduct requirements for companies that settle business debt and providing affected businesses with an enforcement route.
Louis Cadets Peck, identified in the hearing as the executive director of the Responsible Business Lending Coalition, described the bill as a response to widespread problems in small-business finance. “This is a great issue because there is, wide agreement and ready solutions,” he told the committee. He said the current market includes higher-cost, less…
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