Louisiana Senate Bill SB256

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 4/21/10
• Engrossed: 4/27/10
• Refer: 4/28/10
• Report Pass: 5/24/10
• Enrolled: 6/17/10
• Chaptered: 7/6/10
• Passed: 7/6/10

Caption

Enacts the Louisiana Exchange Sale of Receivables Act. (gov sig) (EN NO IMPACT See Note)

Impact

The implementation of this bill will significantly affect how receivables transactions are conducted in Louisiana. By defining the buyer's rights and reinforcing the true sale status of receivables sold over exchanges, the bill aims to establish a more secure and transparent marketplace. This legislative move enhances the legal standing of such transactions, providing confidence to sellers and buyers alike, while aligning state laws with the principles found in the Uniform Commercial Code.

Summary

Senate Bill No. 256 enacts the Louisiana Exchange Sale of Receivables Act, which is designed to support businesses in selling their receivables through qualified exchanges in Louisiana. The intent is to clarify and promote the legal status of these transactions under Louisiana law, ensuring that they are recognized as true sales and not subject to recharacterization as loans or extensions of credit. This caters to both local businesses seeking liquidity and potential buyers looking for investment opportunities in receivables.

Sentiment

The sentiment surrounding SB256 appears to be largely positive among its proponents, who view the bill as a progressive step for commercial transactions in Louisiana. Supporters argue that it solidifies Louisiana's position in fostering a modern economic environment that leverages technology and electronic exchanges. However, there remains a degree of skepticism about the bill's long-term implications and how it may affect less experienced sellers who might struggle to navigate the new environment effectively.

Contention

While the bill seeks to eliminate potential legal uncertainties regarding the sale of receivables, critics may question whether it could unintentionally encourage a risky financial landscape, where sellers may find themselves more vulnerable. The significant emphasis on ensuring that receivables cannot be classified as loans raises concerns regarding consumer protections and the handling of defaults, suggesting a need for ongoing discussions about balancing innovation with accountability in financial exchanges.