Introduced by Senator Monique Limón, California Senate Bill 577 (SB-577) will permanently reinstate Section 22050.5 of the California Financial Code, exempting persons engaging in the business of a finance lender from obtaining a lenders license from the California Department of Financial Protection and Innovation (DFPI) if no more than 1 commercial loan is made in a 12-month period. After several amendments to the bill earlier this year, SB-577 passed in the State Assembly on April 7, 2022 and the Senate unanimously concurred on April 21, 2022.
As of yesterday, April 27, 2022, SB-577 was delivered to the Governor's desk for signature. Governor Newsom has until May 9, 2022, 12 days from the date of delivery, to act on the bill. If signed by the Governor, SB-577, as urgency legislation, will go into effect immediately. On and after the effective date, CDEs and other special purpose entities may once again make a single commercial loan in California in a 12-month period without obtaining a California Finance Lenders license, as was the case prior to December 31, 2021. We remain optimistic that CFL 22050.5 will be reinstated shortly.