CARB “Loan Denial Provision” Language a Farce

15 – Day Rule Change Procedures Make Access Unlikely for Most Truckers

After all the hoopla, name calling, and even one lawsuit to stop CARB from moving forward with proposed amendments to the Statewide Truck and Bus rule, it appears CARB staff never intended to allow anyone to access a new provision called the “Economic Hardship Extension” or commonly referred to as the “loan denial provision.”

On July 1, 2014 CARB issued its Supplemental 15-Day Notice describing how the agency intends to implement board approved amendments to give truckers – typically owner-operators and small-business truckers unable to secure financing more time to comply with CARB’s rule. The requirements laid-out in the 15 – Day Notice are so onerous it is difficult to imagine many truck owners will attempt to take advantage of this new provision.

CARB staff promised to establish a “high bar” to utilize this new provision and unlike the science they manufactured to support the Truck and Bus rule, they didn’t lie about this one! Anybody wishing to apply for this provision will need to get three price quotes as follows:

  1. Written price quote from an authorized VDECS installer for the purchase and installation of a PM filter; AND
  2. Written price quote from a vehicle dealer for a suitable replacement vehicle that has a 1996 or newer engine (if the truck doesn’t have a factory installed PM filter, it must have already been retrofit with one); AND
  3. A written estimate from a leasing entity for a one to three year vehicle lease as a replacement for the existing vehicle.

One can argue whether one or two requirements should suffice for the purpose of getting this extension, but the real poison pill is number three – once you get past whether a Ryder or Penske will even do business with you, they’ll most certainly offer you pricing for a long-term lease that many small-businesses can’t afford because the monthly payments are sky-high. CARB reserves the right to deny you access to this extension if – in their opinion you can afford the lease arrangement. It only gets more difficult…

The owner/applicant must also submit financial data going back to January 1, 2012 to include such items as; annual revenue, debt, total assets, and credit score. Basically, a complete profit/loss statement which for many will include their tax return and if you are a married sole-proprietor filing jointly with your spouse, CARB gets to peak at both your finances and judge you.

Next, you need to get rejected for financing by a state or nationally chartered financial institution AND you must apply with a participating California Capital Access Program (CalCAP) lender. Most out-of-state truck owners can’t qualify for a CalCAP loan because of restrictive residency requirements (those applicants would simply need to explain to CARB they are not qualified to access CalCAP).

Next, you need to provide a copy of the credit report used by the financial institution to reject your loan application AND a signed statement from the lender that you don’t qualify for a loan.

Everyone, even those under the current “Good Faith Effort” because they were denied financing, will need to reapply for financing because CARB will only accept loan rejection letters dated between July 1, 2014 and December 31, 2014.

You have until January 31, 2015 to register with CARB for this new extension but will also be required to file an update by January 31, 2016 to get full use of the provision through January 1, 2017. Some of the information you’ll need to update are:

  • Annual gross revenue
  • Net income
  • Debt
  • Total net worth
  • Number of years in business
  • Any bankruptcy or tax liens

As if completing all these steps isn’t humiliating enough, CARB requires you to label both sides of your truck with the letters “EH.” The letters must be white on a black background that is a least three inches by five inches. If you didn’t already guess, the E and H stand for, “Economic Hardship.” Yes, the whole world gets to know you are down on your luck.

To read all the proposed language changes, go to:

Interested parties have through 5 p.m. on July 17th to supply comments to CARB about all the proposed revisions to the language contained in the Truck and Bus rule implementing board adopted changes. To electronically submit comments, go to: