AB 2350: Consumer loans: residential real property rental payments. - California

03/26/26 - Amended Assembly → 04/28/26 - Amended Assembly · 14 edits · Apr 28, 2026

MAJOR

The bill was substantially restructured: it removed a provision that prohibited landlords from making rent-split loans to tenants (former Civil Code Section 1950.3) and added an entirely new Article 7 to the Financial Code creating detailed consumer protection rules for 'Rent Now Pay Later' services. The bill still prohibits licensed finance lenders from making consumer loans for rent obligations, but now also prescribes specific requirements (payment limits, fee caps, disclosure duties, advertising restrictions) for providers of these services. This shifts the approach from a broad ban to a regulated framework with concrete consumer safeguards.

Scope change

The bill's scope narrowed by removing the landlord/owner prohibition (Civil Code) and broadened by adding a comprehensive regulatory framework (new Financial Code Article 7) that prescribes specific operational requirements, fee limits, disclosure duties, and advertising restrictions for Rent Now Pay Later service providers. The prohibition on licensed finance lenders making consumer loans for rent obligations (Section 22348) remains unchanged.

SCOPE

Removed Civil Code Section 1950.3, which had prohibited owners of residential real property (landlords) from making loans to tenants for rent obligations, along with its enforcement provisions allowing affected persons, the Commissioner of Financial Protection and Innovation, or the Attorney General to bring actions.

DEFINITION

Added definitions for 'Provider' (a finance lender or servicer providing a loan to advance residential rent payments who furnishes credit reporting info, provides notices, manages payment dates, initiates automatic withdrawals, or charges subscription fees) and 'Service' (providing a loan to advance a residential rent payment).

REQUIREMENT

Added a cap limiting Rent Now Pay Later services to no more than two installment payments.

Added late fee caps: if the service includes a subscription or flat fee, missed payment fees cannot exceed 50 percent of that fee; if no subscription or flat fee exists, missed payment fees cannot exceed 0.5 percent of the rent amount.

Added a prohibition on servicers charging any fee for the service unless the fee is actually incurred to complete the rent payment transaction (such as credit card transaction fees or passthrough fees required by the apartment management payment processor).

Added a cure period requiring consumers to have until the fifth day of the month after the service was originated to pay the full balance owed, and requiring the provider to discontinue the service if the borrower does not pay by that date.

Added a prohibition on charging interest or any other charge on late fees or the remaining balance for the service.

Added a consumer choice requirement allowing the consumer to select the date for the second installment payment (on or before 30 days after the first) and at least two calendar days after the second payment due date to change the next payment date.

Added a requirement that the service allow the consumer to pay the amount owed in full at any time without penalty.

Added a prohibition on servicers requiring a minimum subscription term, service term, or imposing any other condition to incentivize retention.

Added a limit of one automatic withdrawal attempt per bank account, with a requirement to immediately notify the consumer if the withdrawal fails due to insufficient funds or other issues.

Added a prohibition (to the extent consistent with federal law) on reporting delinquent payments to consumer credit reporting agencies.

Added pre-enrollment disclosure requirements including all fees, an itemized list of charges in the rent calculation, clear information that rental agreement grace periods are independent of the servicer cure period, and consequences of failure to cure. Disclosures must be available in each language designated in Civil Code Section 1632.

Added a prohibition on advertising 0 percent APR for a service unless it includes no interest, flat fees, or subscription fees.

04/28/26 - Amended Assembly → AB2350 · 1 edit

MINOR

No substantive policy changes occurred between these two versions. The diff reflects a change in document presentation format, from a plain-text legislative document layout to a web-page rendering of the same bill text. All statutory provisions, definitions, thresholds, and requirements remain identical.

TECHNICAL

The bill text was re-formatted from a plain-text legislative document into a web page layout with navigation elements (skip to content, home, accessibility, FAQ, etc.) and different metadata display. No changes to the actual statutory language of Section 22348 or Article 7 (Sections 22475(a) through (d)) were made.

02/19/26 - Introduced → 03/16/26 - Amended Assembly · 6 edits · Mar 16, 2026

MODERATE

AB 2350 was dramatically expanded from a minor nonsubstantive pronoun fix (changing 'his or her' to 'their') into a substantial new law prohibiting both residential property owners and licensed finance lenders from making loans whose purpose is to pay rent obligations, including rent split loan agreements. The amendment adds two entirely new code sections with enforcement mechanisms and creates a state-mandated local program because the new prohibition operates as a crime under the California Financing Law.

SCOPE

Added Civil Code Section 1950.3, which prohibits owners of residential real property from making loans to a person if a purpose of the loan is to pay for any obligation under a lease or rental agreement, including rent split loan agreements.

Added Financial Code Section 22348, which prohibits licensees (finance lenders, brokers, and program administrators) from making a consumer loan if a purpose of the loan is to pay for any obligation under an agreement to rent residential real property, including rent split loan agreements.

State-mandated local program changed from 'no' to 'yes' because the new financial code section creates a crime under the California Financing Law (which makes willful violations criminal).

ENFORCEMENT

Added enforcement provisions allowing the prohibition to be enforced by an impacted person, the Commissioner of Financial Protection and Innovation, or the Attorney General.

FISCAL

Fiscal committee review changed from 'no' to 'yes', and a new Section 3 was added stating no state reimbursement is required for local agency costs because the act creates or changes a crime.

TECHNICAL

The original nonsubstantive change (changing 'his or her' to 'their' in Financial Code Section 22010) was retained but renumbered as the final section of the bill rather than the only section.

03/16/26 - Amended Assembly → 03/26/26 - Amended Assembly · 4 edits · Mar 26, 2026

MODERATE

The March 26 amendment removes a nonsubstantive amendment to Financial Code Section 22010 (definitions of finance lender, broker, and program administrator) and tightens the prohibition language from 'making a loan' to 'making a consumer loan' for licensed entities. The fiscal committee vote changed from 'no' to 'yes' and the state-mandated local program designation changed from 'no' to 'yes,' indicating the bill now carries a formal state mandate finding.

SCOPE

The amendment to Financial Code Section 22010, which made nonsubstantive changes to the definitions of 'finance lender,' 'broker,' and 'program administrator,' was entirely removed from the bill.

The state-mandated local program designation changed from 'no' to 'yes,' formally recognizing that the bill imposes a state-mandated local program on local agencies.

REQUIREMENT

The prohibition on finance lenders, brokers, and program administrators was narrowed from prohibiting them from 'making a loan' to 'making a consumer loan' if the purpose is to pay for residential real property rental obligations.

FISCAL

The fiscal committee vote changed from 'no' to 'yes,' indicating the bill now requires fiscal committee review/approval.

Consumer loans: residential real property rental payments.

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