SB 36 amends California Civil Code Section 1770 to add specific unlawful business practices and tighten disclosure standards across multiple consumer-facing industries. Notably, the bill treats violations of Penal Code Section 396 (price gouging during declared emergencies) as an unlawful practice under Section 1770, expands several advertising and pricing transparency rules, and bars mortgage brokers or lenders from using home‑improvement contractors to negotiate loans secured by a borrower’s residence.
The practical effect is to broaden the reach of private enforcement under the Consumers Legal Remedies Act (CLRA) while imposing concrete formatting, content, and timing requirements for solicitations, veterans’ events, pricing displays, and certain finance-related advertising. Compliance officers, retailers, mortgage lenders, and event promoters will need to update disclosures and contracts to avoid new civil exposure and statutory penalties.
At a Glance
What It Does
Adds a specific clause to Section 1770 making violations of Penal Code 396 (price gouging in an emergency) an unlawful practice; prescribes exact disclosure text and font-size requirements for certain financial solicitations and veterans’ benefit events; requires mandatory fees to be included in advertised prices except for narrow exceptions; and bars mortgage brokers/lenders from using contractors to negotiate home‑secured loans for home improvements.
Who It Affects
Retailers, restaurants, grocery and grocery-delivery services, third‑party delivery platforms, broadband providers, mortgage brokers and lenders, home‑improvement contractors, promoters of veterans’ outreach events, and marketers who send targeted financial solicitations.
Why It Matters
The bill creates new civil remedies against price gouging and deceptive advertising by folding those offenses into Section 1770, standardizes what counts as “clear and conspicuous,” and establishes precise, enforceable formatting rules that can be litigated in CLRA actions — increasing exposure for noncompliant firms and shifting risk toward private enforcement.
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What This Bill Actually Does
SB 36 rewrites parts of Section 1770 to make a wider set of commercial conduct actionable as unfair or deceptive under California’s consumer law. The bill enumerates numerous advertising and representation offenses (many already familiar to compliance teams) and inserts a new cross-reference: a violation of Penal Code Section 396 — price gouging during a declared state or local emergency — now also qualifies as an unlawful practice under Section 1770.
That cross-reference converts certain criminal or emergency-price rules into grounds for civil claims under the CLRA.
Beyond the price‑gouging hook, the bill imposes specific disclosure and presentation requirements. Solicitations for consumer financial products must include the covered entity’s name and contact information and carry a conspicuous, bold, large‑type declaration that the material is an advertisement; mailed solicitations must also show a front‑of‑envelope disclosure.
The statute prescribes how advertised prices must be presented — all mandatory fees and charges must be included in a displayed price except for taxes and reasonable shipping — and it carves out limited exemptions for certain grocery and restaurant contexts while explicitly excluding third‑party food delivery platforms from those exemptions.SB 36 also tightens protections for particular audiences: veterans’ benefit events that are not government‑sponsored must carry standardized disclaimers (in the same font size as the word “veteran”), and seminars must open with both oral and written notices. The bill bars mortgage brokers and lenders from using home‑improvement contractors to negotiate loan terms when the loan is secured by the borrower’s residence for the purpose of financing that home improvement, while allowing ordinary referrals that comply with other law.Finally, the bill addresses the long‑running compliance ambiguity around “clear and conspicuous” language by tying that phrase to a statutory definition (Section 1791(u)) effective on a specified future date.
Several statutory exemptions are preserved (for entities already covered by federal financial disclosure regimes and for providers complying with FCC broadband labeling), but the combination of new cross-references, formatting mandates, and enumerated unfair practices substantially increases the universe of conduct vulnerable to civil enforcement.
The Five Things You Need to Know
Section 1770 is amended so that violating Penal Code Section 396 (price gouging during a declared emergency) is an unfair or deceptive practice subject to civil remedies under the CLRA.
Solicitations for consumer financial products must include the covered person’s name and contact information and display the statement “THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.” in at least 18‑point bold type (16‑point bold required on the front of envelopes for mailed solicitations).
The bill requires that advertised prices include all mandatory fees and charges except government taxes and reasonable postage/carriage charges; grocery and restaurant exemptions are narrow and explicitly do not cover third‑party food delivery platforms.
Veterans’ benefit seminars and similar events not sponsored by the VA or state veterans’ offices must display a standardized disclaimer in the same font size as the word “veteran” and provide that statement orally and in writing at the start of events.
As of July 1, 2025, any disclosure that must be “clearly” or “clearly and conspicuously” presented must meet the statutory definition of “clear and conspicuous” in Section 1791(u); separately, the bill declares an operative date of July 1, 2024 for the section as a whole.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Price gouging during emergencies becomes a CLRA unfair practice
This new subparagraph makes a violation of Penal Code 396 — California’s price‑gouging statute applied during declared state or local emergencies — an unfair or deceptive act under Section 1770. Practically, that lets consumers bring civil CLRA claims (injunctive relief, restitution, statutory damages where applicable, and attorney’s fees) for the same conduct that might also attract criminal or civil penalties under Penal Code 396 itself. The provision therefore creates parallel pathways for enforcement and private litigation.
Limits on mortgage brokers and lenders in home‑improvement financing
This paragraph prohibits mortgage brokers or lenders from using a home‑improvement contractor to negotiate the terms of any loan secured by the borrower’s residence when the loan finances a home‑improvement contract. The ban applies to licensed finance lenders, residential mortgage lenders, and real‑estate brokers as defined in the bill. The text preserves a contractor’s ability to refer a consumer to a lender or for a lender to purchase an executed contract so long as other laws (such as Section 7157 of the Business and Professions Code) are respected, but it removes the ability to have a contractor negotiate loan terms on the borrower’s behalf.
Specific notice and formatting for financial solicitations
This section demands that solicitations for consumer financial products include the name of the covered person, contact information, and a bold, large‑type advertisement disclosure in the same language as the solicitation. The bill defines ‘solicitation’ narrowly to exclude mass advertising and consumer‑initiated communications. It also provides an explicit exception for entities already regulated under various federal and state financial disclosure laws, reducing overlap for regulated lenders but leaving nonbank actors and market entrants squarely within the new formatting regime.
Price‑display rule and limited exemptions
Advertised prices must include all mandatory fees and charges, subject only to taxes and reasonably incurred postage/carriage charges. The bill deems compliance with certain FCC broadband labeling requirements to satisfy this paragraph for broadband providers and lists several federal and state financial disclosure regimes that exempt financial entities for covered transactions. The provision also carves out an operational exception for mandatory fees on individual food and beverage items sold directly by restaurants or grocery stores — but the exemption expressly excludes third‑party delivery platforms, creating a distinct compliance line between store‑owned delivery and aggregator platforms.
Veterans’ event disclaimers and oral/written notice
Promoters of events addressing veterans’ benefits must include a specific written statement disclosing whether the event is sponsored by VA or state veterans’ offices and must affirm orally and in writing that the promoter is not authorized to file certain VA benefit applications unless the promoter is a licensed agent or attorney. The bill requires these disclaimers to appear in at least the same type size and font as the word “veteran,” making font equality an enforceable element rather than a best practice.
‘Clear and conspicuous’ definition and operative dates
Subdivision (c) ties any statutory requirement that something be ‘clearly’ or ‘clearly and conspicuously’ disclosed to the definition of ‘clear and conspicuous’ in Section 1791(u) as of July 1, 2025, producing a fixed, statutory standard. Subdivision (d) sets an operative date for the section as a whole of July 1, 2024, creating two different future reference dates the compliance community will need to reconcile when implementing changes and training staff.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Households and consumers affected by emergency price spikes — they gain a civil pathway (CLRA claims) to seek relief for price‑gouging conduct that previously might have been enforceable only through criminal or administrative channels.
- Seniors and other vulnerable consumers targeted by home‑solicitations — strengthened prohibitions and the mortgage‑broker/contractor restriction reduce a known channel for abusive home‑secured lending tied to home improvements.
- Veterans and attendees of benefit seminars — required, standardized disclaimers and oral notices reduce the risk that veterans are misled by private promoters offering paid services that the VA itself does not endorse, improving transparency at sales events.
Who Bears the Cost
- Retailers, restaurants, grocery stores, and delivery platforms — they must change pricing displays, menus, and listings to ensure mandatory fees are included and disclaimers are presented in prescribed formats; third‑party delivery platforms lose the grocery/restaurant exemption and face higher compliance costs.
- Mortgage brokers, lenders, and home‑improvement contractors — brokers and lenders cannot have contractors negotiate loan terms on home‑secured financing for improvements, disrupting referral and origination workflows and possibly reducing some financing channels for contractors.
- Marketers and direct‑mail vendors — the font‑size and bolding requirements for financial solicitations and envelope disclosures create production and design changes that affect campaign costs and A/B testing practices.
- Event promoters and insurance/financial sales representatives who market to veterans — they must add written and oral disclosures, potentially altering event formats and sales scripts and risking litigation for improper presentation.
Key Issues
The Core Tension
The central dilemma is balancing stronger consumer protection through civil enforcement and prescriptive disclosure rules against the risk of imposing heavy, litigation‑driven compliance costs and operational constraints on legitimate business practices; in short, the bill widens consumer remedies but does so by turning formatting and content decisions into enforceable legal liabilities.
The bill merges emergency price‑gouging statutes with the CLRA, which enables private civil litigation for conduct previously enforced primarily through criminal or administrative means. That creates the risk of parallel enforcement and duplicative liability for the same factual conduct: a seller could face both Penal Code penalties and CLRA suits that seek restitution, injunctive relief, and attorney fees.
This overlap raises questions about which remedies apply in multi‑actor incidents and how courts will manage concurrent claims.
The statute standardizes presentation requirements by pointing to a separate statutory definition of “clear and conspicuous” that takes effect on a later date, while declaring the operative effective date for the section earlier. That timing mismatch could produce uncertainty for compliance teams about which standards apply when; vendors will need precise implementation plans and legal advice to avoid inadvertent noncompliance.
Additionally, the bill mixes precise technical prescriptions (font sizes and placement requirements) with intentionally subjective standards (what is an “unreasonable fee”), inviting litigation testing both vagueness and reasonableness. The exemptions for entities covered by federal laws narrow exposure for regulated financial institutions but could create uneven treatment among market participants and ambiguous boundaries for fintech entrants.
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