The California Department of Financial Protection and Innovation (DFPI) has released the Translated Notice to Cosigner on its website, in anticipation of a January 1, 2023 effective date for its cosigner notice amendment. (For more background on additional languages covered by the amendments to California SB 633, see this previous alert.)
Lenders may use these translated notices from the DFPI website to satisfy the cosigner notice requirement. Therefore, any entity offering a consumer credit contract in California (including loans, retail installment contracts, consumer leases, and other extensions of credit) should review and implement the translated cosigner notice prior to January 1. Note that the DFPI did not provide any guidance to supplement the translations, so creditors will need to rely on the text of the bill to determine how to implement the translations. If the amended notice is not implemented prior to the effective date, any entity offering consumer credit contracts in California will potentially be subject to the risk that a cosigner can claim that he or she is not bound to pay on the contract if the borrower stops making payments.
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