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AB-2558 • 2026

Financial institutions: loans: interest rates.

Financial institutions: loans: interest rates.

Crime Education
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Berman (A) , Aguiar-Curry
Last action
2026-04-23
Official status
In committee: Set, first hearing. Hearing canceled at the request of author.
Effective date
Not listed

Plain English Breakdown

The bill summary and digest do not provide specific details on how financial institutions must comply with state-mandated local programs.

Interest Rate Limits on Small Loans

AB-2558 sets limits on the interest rates financial institutions can charge for loans under $2,500 and deferred deposit transactions based on federal laws as of January 1, 2026.

What This Bill Does

  • Prohibits licensees from receiving charges at a rate exceeding an annual percentage rate set forth in specified federal laws and regulations as of January 1, 2026 for loans under $2,500.
  • Updates the California Deferred Deposit Transaction Law to prohibit total fees charged to customers for deferred deposit transactions from exceeding the APR set by federal laws effective January 1, 2026.

Who It Names or Affects

  • Financial institutions that make loans under $2,500 to consumers.
  • Customers who take out small loans or deferred deposit transactions.

Terms To Know

Deferred Deposit Transaction
A type of loan where a customer writes a check for the amount borrowed plus fees, which is deposited by the lender but not cashed until a later date.
Annual Percentage Rate (APR)
The yearly cost of borrowing money expressed as a percentage that includes interest and other charges.

Limits and Unknowns

  • Does not specify the exact federal laws and regulations used to calculate APR limits.
  • Requires financial institutions to comply with new state-mandated local programs without providing specific details on implementation.
  • The bill has passed both chambers of the California Legislature but its final status, including whether it becomes law or is vetoed by the governor, remains uncertain.

Bill History

  1. 2026-04-23 California Legislative Information

    In committee: Set, first hearing. Hearing canceled at the request of author.

  2. 2026-03-09 California Legislative Information

    Referred to Com. on B. & F.

  3. 2026-02-21 California Legislative Information

    From printer. May be heard in committee March 23.

  4. 2026-02-20 California Legislative Information

    Read first time. To print.

Official Summary Text

AB 2558, as introduced, Berman.
Financial institutions: loans: interest rates.
The California Financing Law (CFL) generally regulates loans made by finance lenders, brokers, and program administrators. The CFL authorizes licensees who make a consumer loan to contract for and receive charges with blended rates based on the amount of the money loaned, up to loans of a bona fide principal amount of less than $2,500. The CFL provides that a willful violation of any of its provisions a crime.
This bill would instead prohibit a licensee who lends any sum of money less than $2,500 from contracting for or receiving charges at a rate exceeding an annual percentage rate set forth in, and calculated by, specified federal laws and regulations as in effect on January 1, 2026. By expanding a crime, this bill would impose a state-mandated local program.
The California Deferred Deposit Transaction
Law (CDDTL) generally regulates deferred deposit transactions. The CDDTL prohibits the fee for a deferred deposit transaction from exceeding 15% of the face amount of the check. The CDDTL provides that a willful violation of any of its provisions is crime.
This bill would instead prohibit the total amount charged to a customer for a deferred deposit transaction from exceeding the annual percentage rate set forth in, and calculated by, specified federal laws and regulations as in effect on January 1, 2026. By expanding a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a
specified reason.

Current Bill Text

Read the full stored bill text 
Download Bill PDF