California Assembly Bill AB2350

California 2025-2026 Regular Session

• Introduced: 2/19/26
• Refer: 3/16/26
• Report Pass: 3/16/26
• Refer: 3/17/26
• Report Pass: 3/26/26
• Refer: 4/6/26
• Report Pass: 4/27/26
• Refer: 4/29/26
• Report Pass: 5/6/26
• Engrossed: 5/21/26
• Refer: 5/21/26
• Refer: 6/3/26

Caption

An act to add Section 22348 to Article 7 (commencing with Section 22475) to Chapter 2 of Division 9 of the Financial Code, relating to consumer loans.

Impact

If enacted, AB 2350 will reshape financial lending practices within California, particularly emphasizing transparency and consumer protection in the context of rental obligations. The bill introduces a framework that limits the financial burden on consumers by capping fees associated with late payments and restricting the conditions under which loans can be made for rent payments. Additionally, it ensures that consumers receive clear disclosures about the terms and potential costs involved with such loans, effectively enhancing consumer awareness and safeguarding their rights under the law.

Summary

Assembly Bill 2350, introduced by Assembly Member McKinnor, seeks to amend the California Financing Law (CFL) to regulate consumer loans specific to residential real property rental obligations. The bill prohibits finance lenders, brokers, and program administrators from offering consumer loans intended to cover rent payments. It also sets forth stringent requirements for such loans, addressing the maximum number of installment payments, permissible late fees, and the conditions under which loans may be advertised as having 0% APR. These amendments aim to protect consumers from exploitative financial practices related to rent payments.

Sentiment

The sentiment surrounding AB 2350 has generally been positive among consumer advocacy groups, as it addresses potentially predatory lending practices and aims to provide greater clarity for renters facing financial pressures. However, some financial industry representatives have expressed concerns about the limitations on lending practices, arguing that such restrictions could limit access to necessary funds for tenants struggling to meet rental obligations. The debate has highlighted a critical discussion around consumer protection versus the operational flexibility of financial institutions.

Contention

One notable point of contention is the restriction on the number of installment payments allowable under the proposed loan agreements, which is set at a maximum of two. This limitation may appear to protect consumers but could also restrict their financial options in critical times. Furthermore, the stipulation prohibiting the advertising of 0% APR without specific conditions necessitates clarity on how such terms will be enforced, potentially leading to confusion among both consumers and lenders. These aspects of the bill may lead to further discussions in the legislative process as stakeholders weigh the benefits of consumer protections against the practicality for lenders.