23 LC 50 0478S
H. B. 84 (SUB)
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The House Committee on Banks and Banking offers the following substitute to HB 84:
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to selling1
and other trade practices, so as to provide for commercial financing disclosures; to require2
certain persons who provide commercial financing transactions to make certain disclosures;3
to provide for penalties; to provide for applicability; to provide for definitions; to provide for4
related matters; to repeal conflicting laws; and for other purposes.5
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6
SECTION 1.7
Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to selling and other8
trade practices, is amended by adding a new Code section to read as follows:9
"10-1-393.18.
10
(a) As used in this Code section, the term:11
(1) 'Accounts receivable purchase transaction' means a transaction in which a business12
forwards or otherwise sells to a person all or a portion of the business's accounts, as13
defined in Code Section 11-9-102, or payment intangibles, as defined in Code Section14
11-9-102, at a discount to the accounts' or payment intangibles' expected value.15 23 LC 50 0478S
H. B. 84 (SUB)
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(2) 'Advance fee' means any consideration which is assessed or collected prior to the
16
closing of a commercial financing transaction by a broker.17
(3) 'Broker' means a person who, for compensation or the expectation of compensation,18
arranges a commercial financing transaction between a third party and a business in the19
state that would, if executed, be binding upon that third party and communicates that20
offer to a business located in this state. Such term excludes a 'provider,' and any21
individual or entity whose compensation is not based or dependent upon on the terms of22
the specific commercial financing transaction obtained or offered.23
(4) 'Business' means a private enterprise carried on for the purpose of gain or economic24
profit.25
(5)(A) 'Business purpose transaction' means a transaction from which the resulting26
proceeds that a business receives are:27
(i) Provided to the business; or28
(ii) Intended to be used to carry on the business.29
(B) Such term shall not include a transaction from which the resulting proceeds are30
intended to be used for personal, family, or household purposes.31
(C) For purposes of determining whether a transaction is a business purpose32
transaction, a provider may rely on a written statement of intended purpose, signed by33
an individual authorized to sign on behalf of the business. Such written statement may34
be contained in an application, agreement, or other document signed by an individual35
authorized to sign on behalf of the business.36
(6) 'Commercial financing transaction' means a business purpose transaction:37
(A) Under which a person extends a business a commercial loan or a commercial38
open-end credit plan; or39
(B) That is an accounts receivable purchase transaction.40
(7) 'Commercial loan' means a loan to a business, regardless of whether the loan is41
secured.42 23 LC 50 0478S
H. B. 84 (SUB)
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(8) 'Commercial open-end credit plan' means commercial financing extended to a
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business on terms under which:44
(A) The creditor reasonably contemplates repeat transactions; and45
(B) Subject to any limit set by the creditor, the amount of financing that the creditor46
may extend to the business during the term of the plan is made available to the extent47
that any outstanding balance is repaid.48
(9) 'Motor vehicle dealer' means a dealer as defined in Code Section 40-2-39 or a used49
motor vehicle dealer as defined in Code Section 43-47-2.50
(10) 'Provider' means a person who consummates more than five commercial financing51
transactions in this state during any calendar year and includes, but is not limited to, a52
person who, under a written agreement with a depository institution, offers one or more53
commercial financing products provided by the depository institution via an online54
platform that the person administers.55
(b) The provisions of this Code section shall not apply to:56
(1) A provider that is a federally insured depository financial institution;57
(2) A provider that is:58
(A) A subsidiary, an affiliate, or a holding company of a federally insured depository59
financial institution; or60
(B) A service corporation for a federally insured depository financial institution;61
(3) A provider that is regulated under the federal Farm Credit Act, 12 U.S.C. Section62
2001, et seq.;63
(4) A provider that is licensed as a money transmitter in accordance with Article 4 of64
Chapter 1 of Title 7;65
(5) A provider that consummates five or fewer commercial financing transactions in the66
state during any 12 month period;67
(6) A commercial financing transaction secured by real property;68 23 LC 50 0478S
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(7) A commercial financing transaction that is a lease as defined in Code Section
69
11-2A-103;70
(8) A commercial financing transaction that is a purchase money obligation as defined71
in Code Section 11-9-103;72
(9) A commercial financing transaction that:73
(A) Involves a commercial loan or a commercial open-end credit plan;74
(B) Is $50,000.00 or more; and75
(C) Extends the commercial loan or the commercial open-end credit plan to:76
(i) A motor vehicle dealer or the motor vehicle dealer's affiliate; or77
(ii) A motor vehicle rental company as defined in Code Section 40-2-167 or the78
motor vehicle rental company's affiliate;79
(10) A commercial financing transaction offered by a person in connection with the sale80
or lease of a product or service that:81
(A) The person manufactures, licenses, or distributes; or82
(B) The person's parent company or the person's owned and controlled subsidiary83
manufactures, licenses, or distributes; or84
(11) A commercial financing transaction of more than $500,000.00.85
(c) For purposes of Chapter 1 of Title 7, a provider's characterization of an accounts86
receivable purchase transaction as a purchase shall be conclusive that the accounts87
receivable purchase transaction is not a loan or a transaction for the use, forbearance, or88
detention of money.89
(d) For purposes of Chapter 1 of Title 7, a provider extending a specific offer for a90
commercial financing transaction on behalf of a depository institution shall not be91
construed to mean that the provider engaged in lending or financing or originated that loan92
or financing.93 23 LC 50 0478S
H. B. 84 (SUB)
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(e)(1) Before consummating a commercial financing transaction, a provider shall
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disclose the terms of the commercial financing transaction in accordance with this Code95
section.96
(2) Only one disclosure must be provided for each commercial financing transaction, and97
a disclosure is not required as a result of the modification, forbearance, or change to a98
consummated commercial financing transaction.99
(3) A provider shall disclose the following information in connection with each100
commercial financing transaction:101
(A) The total amount of funds provided to the business under the terms of the102
commercial financing transaction;103
(B) The total amount of funds disbursed to the business under the terms of the104
commercial financing transaction, if less than the amount described in105
subparagraph (A) of this paragraph, as a result of any fees deducted or withheld at106
disbursement, any amount paid to the provider to satisfy a prior balance, and any107
amount paid to a third party on behalf of the business;108
(C) The total amount to be paid to the provider under the terms of the commercial109
financing transaction;110
(D) The total dollar cost of the commercial financing transaction, calculated by finding111
the difference between:112
(i) The amount described in subparagraph (A) of this paragraph; and113
(ii) The amount described in subparagraph (C) of this paragraph;114
(E)(i) The manner, frequency, and amount of each payment; or115
(ii) If the amount of each payment may vary, the manner, frequency, and estimated116
amount of the initial payment; and117
(F) A statement of whether there are any costs or discounts associated with prepayment118
under the commercial financing transaction, including a reference to the paragraph in119
the commercial financing transaction agreement that creates each cost or discount.120 23 LC 50 0478S
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(4) The commercial financing transaction agreement shall include a description of the
121
methodology for calculating any variable payment amount and the circumstances that122
may cause a payment amount to vary.123
(5) The provisions of this subsection shall apply to any commercial financing transaction124
consummated on or after January 1, 2024.125
(f) No broker shall:126
(1) Assess, collect, or solicit an advance fee from a business to provide services as a127
broker; provided, however, that nothing contained in this paragraph shall preclude a128
broker from soliciting a potential business to pay for, or preclude a potential business129
from paying for, actual services necessary to apply for a commercial financing130
transaction, including, but not limited to, a credit check or an appraisal of security, where131
such payment is made by check or money order payable to a party independent of the132
broker;133
(2) Make or use any false or misleading representations or omit any material fact in the134
offer or sale of the services of a broker or engage, directly or indirectly, in any act that135
operates or would operate as fraud or deception upon any person in connection with the136
offer or sale of the services of a broker, notwithstanding the absence of reliance by the137
buyer;138
(3) Make or use any false or deceptive representation in its business dealings; or139
(4) Offer the services of a broker by making, publishing, disseminating, circulating, or140
placing before the public within this state an advertisement in a newspaper or other141
publication or an advertisement in the form of a book, notice, handbill, poster, sign,142
billboard, bill, circular, pamphlet, letter, photograph, or motion picture or an143
advertisement circulated by radio, loud-speaker, telephone, television, telegraph, or in144
any other way, where said offer or advertisement does not disclose the name, business145
address, and telephone number of the broker. For purposes of this paragraph, the broker146
shall disclose the actual address and telephone number of the business of the broker in147 23 LC 50 0478S
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addition to the address and telephone number of any forwarding service that the broker
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may use.149
(g) The Attorney General may:150
(1) Receive and act on complaints;151
(2) Take action designed to obtain voluntary compliance with this Code section; and152
(3) Commence administrative or judicial proceedings on the Attorney General's own153
initiative to enforce compliance with this Code section.154
(h) A person who violates a provision of this Code section is subject to a civil penalty of155
$500.00 per violation, not to exceed $20,000.00 for all violations arising from the use of156
the same transaction documentation or materials.157
(i) A person who violates a provision of this Code section after receiving written notice158
of a prior violation is subject to a civil penalty of $1,000.00 per violation, not to exceed159
$50,000.00 for all violations arising from the use of the same transaction documentation160
or materials.161
(j) Nothing in this Code section creates a private right of action against any person based162
on failure to comply with the provisions of this Code section.163
(k) A violation of this Code section shall not affect the enforceability of any underlying164
agreement."165
SECTION 2.166
All laws and parts of laws in conflict with this Act are repealed.167