About the Increased Access to Responsible Small Dollar Loans Pilot Program

Senate Bill 318 (Chap. 467, Stats. 2013) was signed into law on October 1, 2013 and is operative January 1, 2014. The bill created the Pilot Program for Increased Access to Responsible Small Dollar Loans (RSDL) to increase the availability of responsible small dollar installment loans of at least $300 but less than $2,500. Finance lenders who are licensed underthe CFLL and approved by the Commissioner of Business Oversight (Commissioner) to participate in the program may charge specified alternative interest rates and charges, including an administrative fee and delinquency fees, on loans of at least $300 but less than $2,500, subject to certain requirements. Licensees participating in the program are also permitted to use the services of a finder as defined in Section 22371 of the Financial Code.

LICENSEES UNDER THE FORMER PILOT PROGRAM FOR AFFORDABLE CREDIT-BUILDING OPPORTUNITIES

Effective January 1, 2014, Senate Bill 318 abolished the former Pilot Program for Affordable Credit-Building Opportunities (Senate Bill 1146 – Chap. 640, Stats. 2010). Licensees approved to participate under the former pilot program are transferred to and approved to participate in the Pilot Program for Increased Access to Responsible Small Dollar Loans without filing the application.

Application

  • Who may Apply for the Pilot Program:
    • The Increased Access to Responsible Small Dollar Loans Pilot Program permits licensed finance lenders to seek approval to participate in a pilot program with the following features:
      • Lenders may offer loans through “finders”; unsecured loans may be from $300 to $2,500.
      • The interest rates are capped at amounts that are marginally higher than the California Finance Lenders Law has previously permitted.
      • Borrowers are entitled to credit education and may build credit by having their loan performance reported to a major credit reporting agency.
      • The program has additional requirements and therefore finance lenders are encouraged to review the law and regulations to see if participation in the program is right for them.
  • The Application Process:
    • An application form to participate in the program may be obtained from any of the Department of Business Oversight’s locations or may be downloaded from the Department’s forms page.
    • Completed applications must be filed with the Los Angeles office.
    • The application MUST be accompanied by non-refundable fees as follows:
      Application Fee for Increased Access to Responsible Small Dollar Loans Pilot Program
      Number of Licensed Finance Lender Locations Application Fee
      1 to 10 $250
      11 to 50 $450
      51 to 100 $650
      Over 100 $850

      *Questions regarding completing and filing an application should be directed to 866-275-2677.*

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Laws and Regulations

Approved by Mona Elsheikh 12/2019

Last updated: Apr 7, 2020 @ 10:31 am