Maryland 2022 Regular Session

Maryland House Bill HB1211 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1211
6	6
7	7	HOUSE BILL 1211
8	8	I1, I2 2lr2030
9	9	CF SB 825
10	10	By: Delegates Crosby and Howard
11	11	Introduced and read first time: February 11, 2022
12	12	Assigned to: Economic Matters
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Consumer Credit – Commercial Financing Transactions 2
19	19
20	20	FOR the purpose of requiring that certain revenue, fees, and examination and investigation 3
21	21	fees and assessments relating to commercial financing transactions be credited to 4
22	22	the Nondepository Special Fund; regulating commercial financing transactions, 5
23	23	including by establishing requirements related to disclosures, calculations of annual 6
24	24	percentage rates, terms of repayments, and other related items, and the extension of 7
25	25	special offers; making a violation of this Act an unfair, abusive, or deceptive trade 8
26	26	practice under the Maryland Consumer Protection Act and subject to certain 9
27	27	enforcement and penalty provisions; and generally relating to commercial financing 10
28	28	transactions. 11
29	29
30	30	BY repealing and reenacting, with amendments, 12
31	31	Article – Commercial Law 13
32	32	Section 13–301(14)(xxxiv) and (xxxv) 14
33	33	Annotated Code of Maryland 15
34	34	(2013 Replacement Volume and 2021 Supplement) 16
35	35
36	36	BY adding to 17
37	37	Article – Commercial Law 18
38	38	Section 13–301(14)(xxxvi) 19
39	39	Annotated Code of Maryland 20
40	40	(2013 Replacement Volume and 2021 Supplement) 21
41	41
42	42	BY repealing and reenacting, with amendments, 22
43	43	Article – Financial Institutions 23
44	44	Section 11–610(a)(13)(i), (b)(1), and (c) 24
45	45	Annotated Code of Maryland 25
46	46	(2020 Replacement Volume and 2021 Supplement) 26
47	47
48	48	BY adding to 27 2 HOUSE BILL 1211
49	49
50	50
51	51	Article – Financial Institutions 1
52	52	Section 12–1101 through 12–1115 to be under the new subtitle “Subtitle 11. 2
53	53	Commercial Financing” 3
54	54	Annotated Code of Maryland 4
55	55	(2020 Replacement Volume and 2021 Supplement) 5
56	56
57	57	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
58	58	That the Laws of Maryland read as follows: 7
59	59
60	60	Article – Commercial Law 8
61	61
62	62	13–301. 9
63	63
64	64	Unfair, abusive, or deceptive trade practices include any: 10
65	65
66	66	(14) Violation of a provision of: 11
67	67
68	68	(xxxiv) The federal Servicemembers Civil Relief Act; [or] 12
69	69
70	70	(xxxv) [§] SECTION 11–210 of the Education Article; or 13
71	71
72	72	(XXXVI) TITLE 12, SUBTITLE 11 OF THE FINANCIAL 14
73	73	INSTITUTIONS ARTICLE; OR 15
74	74
75	75	Article – Financial Institutions 16
76	76
77	77	11–610. 17
78	78
79	79	(a) There is a Nondepository Special Fund that consists of: 18
80	80
81	81	(13) (i) Any other fee, examination or investigation fee or assessment, or 19
82	82	revenue received by the Commissioner under this subtitle, Subtitles 2, 3, 4, and 5 of this 20
83	83	title, Title 12, Subtitles 1, 4, 9, and 10 of this article, Title 12, [Subtitle] SUBTITLES 12 21
84	84	AND 14 of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial 22
85	85	Law Article; and 23
86	86
87	87	(b) Notwithstanding subsection (a) of this section: 24
88	88
89	89	(1) The Commissioner shall pay all fines and penalties collected by the 25
90	90	Commissioner under Title 2, Subtitle 1 of this article, this subtitle, Subtitles 2, 3, 4, and 5 26
91	91	of this title, Title 12, Subtitles 1, 4, 9, [and] 10, AND 11 of this article, Title 12, Subtitle 14 27
92	92	of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial Law 28
93	93	Article into the General Fund of the State; and 29
94	94	HOUSE BILL 1211 3
95	95
96	96
97	97	(c) The purpose of the Fund is to cover the direct and indirect costs of fulfilling 1
98	98	the statutory and regulatory duties of the Commissioner and the State Collection Agency 2
99	99	Licensing Board related to: 3
100	100
101	101	(1) Title 2, Subtitle 1 of this article; 4
102	102
103	103	(2) This subtitle; 5
104	104
105	105	(3) Subtitle 2 of this title; 6
106	106
107	107	(4) Subtitle 3 of this title; 7
108	108
109	109	(5) Subtitle 4 of this title; 8
110	110
111	111	(6) Subtitle 5 of this title; 9
112	112
113	113	(7) Title 12, Subtitle 1 of this article; 10
114	114
115	115	(8) Title 12, Subtitle 4 of this article; 11
116	116
117	117	(9) Title 12, Subtitle 9 of this article; 12
118	118
119	119	(10) Title 12, Subtitle 10 of this article; 13
120	120
121	121	(11) TITLE 12, SUBTITLE 11 OF THIS ARTICLE; 14
122	122
123	123	[(11)] (12) Title 7 of the Business Regulation Article; 15
124	124
125	125	[(12)] (13) Title 12 of the Commercial Law Article; 16
126	126
127	127	[(13)] (14) Title 14, Subtitles 12, 19, and 42 of the Commercial Law Article; 17
128	128
129	129	[(14)] (15) Title 7, Subtitles 1, 3, 4, and 5 of the Real Property Article; 18
130	130
131	131	[(15)] (16) Title 26, Subtitle 6 of the Education Article; and 19
132	132
133	133	[(16)] (17) Any other expense authorized in the State budget. 20
134	134
135	135	SUBTITLE 11. COMMERCIAL FINANCING. 21
136	136
137	137	12–1101. 22
138	138
139	139	(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 23
140	140	INDICATED. 24
141	141
142	142	(B) (1) “CLOSED–END FINANCING ” MEANS A CLOSED –END EXTENSION OF 25 4 HOUSE BILL 1211
143	143
144	144
145	145	CREDIT, SECURED OR UNSECURED , INCLUDING EQUIPMENT FINANCING, THAT: 1
146	146
147	147	(I) DOES NOT MEET THE DEF INITION OF A LEASE U NDER 2
148	148	ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE; AND 3
149	149
150	150	(II) THE PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND 4
151	151	TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 5
152	152
153	153	(2) “CLOSED–END FINANCING ” INCLUDES FINANCING T HAT HAS AN 6
154	154	ESTABLISHED PRINCIPA L AMOUNT AND DURATIO N. 7
155	155
156	156	(C) “COMMERCIAL FINANCING ” MEANS OPEN –END FINANCING , 8
157	157	CLOSED–END FINANCING , SALES–BASED FINANCING , A FACTORING TRANSACT ION, 9
158	158	OR ANOTHER FORM OF FI NANCING, THE PROCEEDS OF WHIC H THE RECIPIENT DOES 10
159	159	NOT INTEND TO USE PR IMARILY FOR PERSONAL , FAMILY, OR HOUSEHOLD 11
160	160	PURPOSES. 12
161	161
162	162	(D) “FACTORING TRANSACTION ” MEANS AN ACCOUNTS RE CEIVABLE 13
163	163	PURCHASE TRANSACTION : 14
164	164
165	165	(1) THAT INCLUDES AN AGRE EMENT TO PURCHASE , TRANSFER, OR 15
166	166	SELL A LEGALLY ENFOR CEABLE CLAIM FOR PAY MENT HELD BY A RECIP IENT FOR 16
167	167	GOODS THE RECIPIENT HAS SUPPLIED OR SERV ICES THE RECIPIENT H AS RENDERED 17
168	168	THAT HAVE BEEN ORDER ED BUT FOR WHICH PAY MENT HAS NOT BEEN MA DE; AND 18
169	169
170	170	(2) THE PROCEED S OF WHICH THE RECIP IENT DOES NOT INTEND TO 19
171	171	USE PRIMARILY FOR PE RSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 20
172	172
173	173	(E) (1) “FINANCE CHARGE ” MEANS THE COST OF CO MMERCIAL 21
174	174	FINANCING REPRESENTE D AS A DOLLAR AMOUNT . 22
175	175
176	176	(2) “FINANCE CHARGE ” INCLUDES: 23
177	177
178	178	(I) A CHARGE PAYA BLE DIRECTLY OR INDI RECTLY BY A 24
179	179	RECIPIENT AND IMPOSE D DIRECTLY OR INDIRE CTLY BY A PROVIDER A S AN 25
180	180	INCIDENT TO OR A CON DITION OF THE EXTENS ION OF COMMERCIAL FI NANCING; 26
181	181
182	182	(II) A CHARGE THAT WOULD BE INCLUDED UNDER 12 C.F.R. 27
183	183	PART 1026.4 IF A TRANSACTION WER E SUBJECT TO 12 C.F.R. PART 1026.4; AND 28
184	184
185	185	(III) ANY ADDITIONAL CHARGE S DETERMINED BY THE 29
186	186	COMMISSIONER . 30
187	187	HOUSE BILL 1211 5
188	188
189	189
190	190	(F) (1) “OPEN–END FINANCING ” MEANS AN AGREEMENT F OR ONE OR 1
191	191	MORE EXTENSIONS OF S ECURED OR UNSECURED OPEN–END CREDIT , THE 2
192	192	PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND TO U SE PRIMARILY FOR 3
193	193	PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 4
194	194
195	195	(2) “OPEN–END FINANCING ” INCLUDES CREDIT EXTE NDED BY A 5
196	196	PROVIDER UNDER A PLA N IN WHICH: 6
197	197
198	198	(I) THE PROVIDER REASONAB LY CONTEMPLATES REPE ATED 7
199	199	TRANSACTIONS ; 8
200	200
201	201	(II) THE PROVID ER MAY IMPOSE A FINA NCE CHARGE ON AN 9
202	202	OUTSTANDING UNPAID B ALANCE; AND 10
203	203
204	204	(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO A 11
205	205	RECIPIENT DURING THE TERM OF THE PLAN , UP TO A LIMIT THAT T HE PROVIDER 12
206	206	SETS, IS GENERALLY MADE AV AILABLE TO THE EXTEN T THAT ANY OU TSTANDING 13
207	207	BALANCE IS REPAID . 14
208	208
209	209	(G) (1) “PROVIDER” MEANS A PERSON THAT EXTENDS A SPECIFIC O FFER 15
210	210	OF COMMERCIAL FINANC ING TO A RECIPIENT . 16
211	211
212	212	(2) “PROVIDER” INCLUDES A PERSON TH AT SOLICITS AND PRES ENTS 17
213	213	A SPECIFIC OFFER OF COMMERCIAL FINANCING ON BEHALF OF A TH IRD PARTY. 18
214	214
215	215	(H) (1) “RECIPIENT” MEANS A PERSON , OR THE PERSON ’S AUTHORIZED 19
216	216	REPRESENTATIVE , THAT APPLIES FOR COM MERCIAL FINANCING AN D IS MADE A 20
217	217	SPECIFIC OFFER OF CO MMERCIAL FINANCING B Y A PROVIDER. 21
218	218
219	219	(2) “RECIPIENT” DOES NOT INCLUDE A P ERSON ACTING AS A 22
220	220	BROKER. 23
221	221
222	222	(I) (1) “SALES–BASED FINANCING ” MEANS A TRANSACTION : 24
223	223
224	224	(I) THAT IS REPAID BY A RECIPIENT TO A PROVID ER OVER TIME 25
225	225	AS A PERCENTAGE OF S ALES OR REVENUE , IN WHICH THE PAYMENT AMOUNT MAY 26
226	226	INCREASE OR DECREASE ACCORDING TO THE VOL UME OF SALES MADE OR REVENUE 27
227	227	RECEIVED BY THE RECI PIENT; AND 28
228	228
229	229	(II) THE PROCEEDS OF WHICH THE RECIPIENT DOES N OT 29
230	230	INTEND TO USE PRIMAR ILY FOR PERSONAL , FAMILY, OR HOUSEHOLD PURPOSE S. 30
231	231
232	232	(2) “SALES–BASED FINANCING ” INCLUDES A TRANSACTI ON 31 6 HOUSE BILL 1211
233	233
234	234
235	235	CONTAINING A TRUE –UP MECHANISM UNDER W HICH THE FINANCING IS R EPAID AS 1
236	236	A FIXED PAYMENT BUT PROVIDES FOR A RECON CILIATION PROCESS TH AT ADJUSTS 2
237	237	THE PAYMENT TO AN AM OUNT THAT IS A PERCE NTAGE OF SALES OR RE VENUE. 3
238	238
239	239	(J) “SPECIFIC OFFER ” MEANS THE TERMS OF C OMMERCIAL FINANCING 4
240	240	THAT ARE QUOTED TO A RECIPIENT, BASED ON INFORMATION OBTAINED FROM OR 5
241	241	ABOUT THE RECIPIENT , WHICH IF ACCEPTED BY THE RECIPIENT ARE BI NDING ON A 6
242	242	PROVIDER, AS APPLICABLE, SUBJECT TO REQUIREME NTS STATED IN THE TE RMS OF 7
243	243	THE COMMERCIAL FINAN CING. 8
244	244
245	245	12–1102. 9
246	246
247	247	THIS SUBTITLE DOES NO T APPLY TO: 10
248	248
249	249	(1) A FINANCIAL INSTITUTIO N; 11
250	250
251	251	(2) A PERSON ACTING AS A T ECHNOLOGY SERVICES P ROVIDER TO AN 12
252	252	ENTITY EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE ENTIT Y’S 13
253	253	COMMERCIAL FINANCING PROGRAM IF THE PERSO N DOES NOT HAVE AN I NTEREST, 14
254	254	ARRANGEMENT , OR AGREEM ENT TO PURCHASE ANY INTEREST IN THE COMM ERCIAL 15
255	255	FINANCING EXTENDED B Y THE ENTITY IN CONN ECTION WITH THE COMM ERCIAL 16
256	256	FINANCING PROGRAM ; 17
257	257
258	258	(3) A LENDER REGULATED UND ER THE FEDERAL FARM CREDIT ACT; 18
259	259
260	260	(4) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL 19
261	261	PROPERTY; 20
262	262
263	263	(5) A LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM 21
264	264	COMMERCIAL CODE; 22
265	265
266	266	(6) A PROVIDER OR OTHER PE RSON WHO MAKES NO MO RE THAN FIVE 23
267	267	COMMERCIAL FINANCING TRANSACTIONS IN THE STATE IN A 12–MONTH PERIOD ; 24
268	268
269	269	(7) A COMMERCIAL FINANCING TRANSACTION OVER $2,500,000; OR 25
270	270
271	271	(8) A COMMERCIAL FINANCING TRANSACTION : 26
272	272
273	273	(I) IN WHICH THE RECIPIEN T IS: 27
274	274
275	275	1. A DEALER, OR AN AFFILIATE OF A DEALER, AS 28
276	276	DEFINED IN § 11–111 OF THE TRANSPORTATION ARTICLE; OR 29
277	277	HOUSE BILL 1211 7
278	278
279	279
280	280	2. A RENTAL VEHICLE COMPA NY, OR AN AFFILIATE OF A 1
281	281	RENTAL VEHICLE COMPA NY, AS DEFINED IN § 18–108 OF THE TRANSPORTATION 2
282	282	ARTICLE; AND 3
283	283
284	284	(II) MADE UNDER A COMMERCI AL FINANCING AGREEME NT OR 4
285	285	COMMERCIAL OPEN –END CREDIT PLAN OF A T LEAST $50,000, INCLUDING A 5
286	286	COMMERCIAL LOAN MADE IN ACCORDANCE WITH T HE COMMERCIAL FINANCING 6
287	287	TRANSACTION . 7
288	288
289	289	12–1103. 8
290	290
291	291	(A) (1) FOR PURPOSES OF DETER MINING WHETHER A FIN ANCING 9
292	292	TRANSACTION IS A COM MERCIAL FINANCING TR ANSACTION, A PROVIDER MAY RELY 10
293	293	ON A STATEMENT OF IN TENDED PURPOSE MADE BY A RECIPIENT. 11
294	294
295	295	(2) A RECIPIENT’S STATEMENT OF INTENDED PURP OSE MAY BE: 12
296	296
297	297	(I) CONTAINED IN THE COMM ERCIAL FINANCING 13
298	298	APPLICATION, COMMERCIAL FINANCING AGREEMENT , OR OTHER DOCUMENT 14
299	299	SIGNED OR CONSENTED TO BY THE RECIPIENT ; 15
300	300
301	301	(II) A SEPARATE STATEMENT S IGNED, MANUALLY OR 16
302	302	ELECTRONICALLY , BY THE RECIPIENT; OR 17
303	303
304	304	(III) IF DOCUMENTED IN THE RECIPIENT’S APPLICATION FILE , 18
305	305	PROVIDED ORALLY BY T HE RECIPIENT. 19
306	306
307	307	(B) A PROVIDER MAY NOT BE REQUIRED TO VERIFY T HAT THE PROCEEDS 20
308	308	OF A COMMERCIAL FINA NCING TRANSACTION AR E BEING USED IN ACCO RDANCE 21
309	309	WITH A RECIPIENT ’S STATEMENT OF INTEN DED PURPOSE . 22
310	310
311	311	(C) THE EXTENSION OF A SP ECIFIC OFFER OR PROV ISION OF DISCLOSURES 23
312	312	FOR COMMERCIAL FINAN CING BY A PROVIDER , IN AND OF ITSELF , MAY NOT BE 24
313	313	CONSTRUED TO MEAN TH AT THE PROVIDER IS O RIGINATING, MAKING, FUNDING, OR 25
314	314	PROVIDING COM MERCIAL FINANCING . 26
315	315
316	316	12–1104. 27
317	317
318	318	(A) EXCEPT AS PROVIDED IN § 12–1108 OF THIS SUBTITLE , FOR PURPOSES 28
319	319	OF THIS SUBTITLE, AN ANNUAL PERCENTAGE RATE SHALL BE: 29
320	320
321	321	(1) EXPRESSED AS A YEARLY RATE, INCLUDING ALL FEES A ND 30
322	322	FINANCE CHARGES ; AND 31 8 HOUSE BILL 1211
323	323
324	324
325	325
326	326	(2) CALCULATED IN ACCO RDANCE WITH THE FEDE RAL TRUTH IN 1
327	327	LENDING ACT. 2
328	328
329	329	(B) IN ADDITION TO THE RE QUIREMENTS OF SUBSEC TION (A)(2) OF THIS 3
330	330	SECTION, AN ANNUAL PERCENTAGE RATE SHALL BE CALCUL ATED BASED ON THE 4
331	331	ESTIMATED TERM OF RE PAYMENT AND THE PROJ ECTED PERIODIC PAYME NT 5
332	332	AMOUNTS OF A COMMERCIAL FINANCING TRANSACTION , REGARDLESS OF WHETHE R 6
333	333	FEDERAL LAW OR REGUL ATION WOULD REQUIRE AN ANNUAL PERCENTAGE RATE TO 7
334	334	BE CALCULATED FOR A CERTAIN TRANSACTION . 8
335	335
336	336	12–1105. 9
337	337
338	338	(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 10
339	339	INDICATED. 11
340	340
341	341	(2) “ESTIMATED TERM OF REP AYMENT” MEANS THE AMOUNT OF 12
342	342	TIME REQUIRED FOR TH E PERIODIC PAYMENTS MADE BY A RECIPIENT IN A 13
343	343	SALES–BASED FINANCING TRAN SACTION TO EQUAL THE TOTAL AMOUNT REQUIRE D 14
344	344	TO BE REPAID. 15
345	345
346	346	(3) “TOTAL REPAYMENT AMOUN T” MEANS THE DISBURSEME NT 16
347	347	AMOUNT OF A SALES –BASED FINANCING TRAN SACTION PLUS THE FIN ANCE CHARGE . 17
348	348
349	349	(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 18
350	350	A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER OF SALES–BASED FINANCING : 19
351	351
352	352	(I) THE TOTAL AMOUNT OF T HE SALES–BASED FINANCING AND 20
353	353	THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 21
354	354	MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 22
355	355
356	356	(II) THE FINANCE CHARGE ; 23
357	357
358	358	(III) THE ESTIMATED ANNUAL PERCENTAGE RATE OF T HE 24
359	359	SALES–BASED FINANCING , USING THE WORDS “ANNUAL PERCENTAGE RATE ” OR THE 25
360	360	ABBREVIATION “APR”; 26
361	361
362	362	(IV) THE TOTAL REPAYMENT A MOUNT; 27
363	363
364	364	(V) THE ESTIMATED TERM OF REPAYMENT ; 28
365	365
366	366	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 29
367	367	PROJECTED PERIODIC P AYMENT AMOUNTS ; 30 HOUSE BILL 1211 9
368	368
369	369
370	370
371	371	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 1
372	372	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 2
373	373	PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 3
374	374
375	375	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 4
376	376	REQUIREMENTS OR SECU RITY INTERESTS. 5
377	377
378	378	(2) (I) FOR PAYMENT AMOUNTS THAT ARE FIXED , A PROVIDER 6
379	379	SHALL DISCLOSE : 7
380	380
381	381	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 8
382	382
383	383	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 9
384	384	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 10
385	385
386	386	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 11
387	387	SHALL DISCLOSE : 12
388	388
389	389	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 13
390	390	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 14
391	391
392	392	2. THE AMOUNT OF THE AVE RAGE PROJECTED 15
393	393	PAYMENTS PER MONTH . 16
394	394
395	395	(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES T HE SALES–BASED 17
396	396	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 18
397	397	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 19
398	398	PAY: 20
399	399
400	400	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 21
401	401	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 22
402	402
403	403	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 23
404	404	CHARGE. 24
405	405
406	406	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 25
407	407	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 26
408	408	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 27
409	409	PORTION OF THE FINANC E CHARGE AND THE MAX IMUM DOLLAR AMOUNT T HE 28
410	410	RECIPIENT COULD BE R EQUIRED TO PAY . 29
411	411
412	412	12–1106. 30 10 HOUSE BILL 1211
413	413
414	414
415	415
416	416	(A) (1) A PROVIDER SHALL USE T HE PROJECTED SALES V OLUME OF A 1
417	417	RECIPIENT TO CALCULA TE THE FOLLOWING INF ORMATION RELATED TO A 2
418	418	SALES–BASED FINANCING TRANSACTION : 3
419	419
420	420	(I) THE ESTIMATED TERM OF REPAYMENT AND THE 4
421	421	PROJECTED PAYMENT AM OUNTS OF A SALES–BASED FINANCING TRAN SACTION; AND 5
422	422
423	423	(II) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A 6
424	424	SALES–BASED FINANCING TRAN SACTION. 7
425	425
426	426	(2) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A SALES–BASED 8
427	427	FINANCING TRANSACTIO N SHALL BE CALCULATE D: 9
428	428
429	429	(I) IN ACCORDANCE WITH TH E FEDERAL TRUTH IN LENDING 10
430	430	ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 11
431	431
432	432	(II) BASED ON THE ESTIMATE D TERM OF REPAYMENT AND 12
433	433	PROJECTED SALES VOLU ME OF A RECIPIENT. 13
434	434
435	435	(B) (1) A PROVIDER MAY CALCULA TE THE PROJECTED SAL ES VOLUME OF 14
436	436	A RECIPIENT USING EI THER THE HISTORICAL METHOD OR THE OPT –IN METHOD. 15
437	437
438	438	(2) (I) A PROVIDER THAT USES T HE HISTORICAL METHOD TO 16
439	439	CALCULATE THE PROJEC TED SALES VOLUME OF A RECIPIENT SHALL USE AN 17
440	440	AVERAGE HISTORICAL V OLUME OF SALES OR RE VENUE. 18
441	441
442	442	(II) A PROVIDER SHALL FIX T HE HISTORICAL TIME P ERIOD 19
443	443	USED TO CALCULATE TH E AVERAGE HISTORICAL VOLUME AND USE THE S AME TIME 20
444	444	PERIOD FOR ALL DISCL OSURE PURPOSES FOR A NY SALES–BASED FINANCING 21
445	445	TRANSACTION PRODUCTS OFFERED. 22
446	446
447	447	(III) EXCEPT AS PROVIDED IN SUBPARAGRAPH (IV) OF THIS 23
448	448	PARAGRAPH , THE FIXED HISTORICAL TIME PERIOD: 24
449	449
450	450	1. MAY NOT BE LESS THAN 1 MONTH AND MAY NOT 25
451	451	EXCEED 12 MONTHS; AND 26
452	452
453	453	2. SHALL BE THE TIME PER IOD DIRECTLY BEFORE THE 27
454	454	SPECIFIC OFFER WAS M ADE. 28
455	455
456	456	(IV) A PROVIDER MAY CHOOSE TO USE THE AVERAGE S ALES FOR 29
457	457	THE SAME NUMBER OF M ONTHS AS THE PROVIDE R WOULD HAVE USED UN DER 30 HOUSE BILL 1211 11
458	458
459	459
460	460	PARAGRAPH (3) OF THIS SUBSECTION W ITH THE HIGHEST SALE S VOLUME WITHIN 1
461	461	THE PAST 12 MONTHS. 2
462	462
463	463	(3) A PROVIDER MAY USE THE OPT –IN METHOD TO DETERMI NE THE 3
464	464	INFORMATION LISTED U NDER SUBSECTION (A)(1) OF THIS SECTION BY U SING A 4
465	465	PROJECTED SALES VOLU ME THAT THE PROVIDER CHOOSES FOR EACH DIS CLOSURE 5
466	466	IF THE RECIPIENT PAR TICIPATES IN A REVIE W PROCESS ESTABLISHE D BY THE 6
467	467	COMMISSIONER. 7
468	468
469	469	(C) A PROVIDER SHALL NOTIF Y THE COMMISSIONER WHICH OF THE TWO 8
470	470	METHODS THE PROVIDER INTENDS TO USE WHEN CALCULATING THE ESTI MATED 9
471	471	ANNUAL PERCENTAGE OF EACH SALES–BASED FINANCING TRAN SACTION. 10
472	472
473	473	(D) (1) ON OR BEFORE JANUARY 1 EACH YEAR, A PROVIDER SHALL 11
474	474	REPORT TO THE COMMISSIONER ON : 12
475	475
476	476	(I) THE ESTIMATED ANNUAL PERCENTAGE RATES GIV EN TO 13
477	477	EACH RECIPIENT ; AND 14
478	478
479	479	(II) THE ACTUAL ANNUAL PER CENTAGE RATES OF EAC H 15
480	480	COMPLETED SALES –BASED FINANCING TRAN SACTION. 16
481	481
482	482	(2) (I) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 17
483	483	SUBSECTION SHALL CON TAIN ANY INFORMATION THE COMMISSIONER CONSIDER S 18
484	484	NECESSARY TO DETERMI NE WHETHER THE DEVIA TION BETWEEN THE EST IMATED 19
485	485	ANNUAL PERCENTAGE RA TES AND ACTUAL ANNUA L PERCENTAGE RATES O F 20
486	486	COMPLETED SALES –BASED FINANCING TRAN SACTIONS IS REASONABLE . 21
487	487
488	488	(II) THE COMMISSIONER MAY CONS IDER EXTRAORDINARY 22
489	489	CIRCUMSTANCES WHEN D ETERMINING WHETHER T HE PROVIDER ’S DEVIATION 23
490	490	BETWEEN THE ESTIMATE D ANNUAL PERCENTAGE RATE AND ACTUAL ANNU AL 24
491	491	PERCENTAGE RATE OF A SALES–BASED FINANCING TRAN SACTION IS REAS ONABLE. 25
492	492
493	493	(III) IF THE COMMISSIONER FINDS TH AT THERE WAS AN 26
494	494	UNREASONABLE DEVIATI ON BETWEEN ESTIMATED AND ACTUAL ANNUAL 27
495	495	PERCENTAGE RATES OF SALES–BASED FINANCING TRAN SACTIONS, THE 28
496	496	COMMISSIONER MAY REQU IRE THE PROVIDER TO USE THE HISTORICAL M ETHOD 29
497	497	INSTEAD OF THE OPT–IN METHOD IN DETERMI NING THE PROJECTED S ALES VOLUME 30
498	498	OF THE RECIPIENT . 31
499	499
500	500	12–1107. 32
501	501
502	502	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 33 12 HOUSE BILL 1211
503	503
504	504
505	505	DISBURSEMENT AMOUNT OF A CLOSED–END FINANCING TRANSA CTION PLUS THE 1
506	506	FINANCE CHARGE . 2
507	507
508	508	(B) (1) A PROVIDER SHA LL DISCLOSE THE FOLL OWING INFORMATION TO 3
509	509	A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR CLOSED –END FINANCING : 4
510	510
511	511	(I) THE TOTAL AMOUNT OF T HE CLOSED–END FINANCING AND 5
512	512	THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 6
513	513	MINUS ANY FEES DEDUC TED OR WITHHELD AT DISBU RSEMENT; 7
514	514
515	515	(II) THE TOTAL REPAYMENT A MOUNT; 8
516	516
517	517	(III) THE FINANCE CHARGE ; 9
518	518
519	519	(IV) THE ANNUAL PERCENTAGE RATE OF THE CLOSED –END 10
520	520	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 11
521	521	ABBREVIATION “APR”; 12
522	522
523	523	(V) THE TERM OF THE FINANCING; 13
524	524
525	525	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 14
526	526	PROJECTED PERIODIC P AYMENT AMOUNTS ; 15
527	527
528	528	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 16
529	529	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 17
530	530	PAYMENT FEES , AND RETURNE D PAYMENT FEES ; AND 18
531	531
532	532	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 19
533	533	REQUIREMENTS OR SECU RITY INTERESTS. 20
534	534
535	535	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 21
536	536	SHALL DISCLOSE : 22
537	537
538	538	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 23
539	539
540	540	2. IF THE PAYMENT F REQUENCY IS OTHER TH AN 24
541	541	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 25
542	542
543	543	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 26
544	544	SHALL DISCLOSE : 27
545	545
546	546	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 28
547	547	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 29 HOUSE BILL 1211 13
548	548
549	549
550	550
551	551	2. THE AMOUNT OF THE AVE RAGE PROJECTED 1
552	552	PAYMENTS PER MONTH . 2
553	553
554	554	(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 3
555	555	UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 4
556	556
557	557	(I) EXPRESSED AS A YEARLY RATE, INCLUSIVE OF ANY FEES 5
558	558	AND FINANCE CHARGES THAT CANNOT BE AVOID ED BY A RECIPIENT ; AND 6
559	559
560	560	(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 7
561	561	IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22, REGARDLESS OF 8
562	562	WHETHER THE ACT OR REGULATION WOU LD REQUIRE THE CALCU LATION. 9
563	563
564	564	(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE CLOSED–END 10
565	565	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 11
566	566	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 12
567	567	PAY: 13
568	568
569	569	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 14
570	570	ACCRUED SINCE THE RECIPIENT ’S LAST PAYMENT ; AND 15
571	571
572	572	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 16
573	573	CHARGE. 17
574	574
575	575	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 18
576	576	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 19
577	577	LAST PAYMENT , A PROVIDER SHALL DISCL OSE THE PERCENTAGE O F ANY UNPAID 20
578	578	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 21
579	579	RECIPIENT COULD BE R EQUIRED TO PAY . 22
580	580
581	581	12–1108. 23
582	582
583	583	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE DRAW 24
584	584	AMOUNT OF THE OPEN –END FINANCING T RANSACTION, MINUS ANY FEES DEDUC TED 25
585	585	OR WITHHELD AT DISBU RSEMENT, PLUS THE FINANCE CHA RGE. 26
586	586
587	587	(B) (1) WHEN CALCULATING THE TOTAL REPAYMENT AMOU NT IN 27
588	588	ACCORDANCE WITH THIS SECTION, A PROVIDER SHALL ASS UME A DRAW AMOUNT 28
589	589	EQUAL TO THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE TO THE RECIPI ENT IF 29
590	590	DRAWN AND HELD FOR T HE DURATION OF THE T ERM OR DRAW PERIOD . 30
591	591
592	592	(2) WHEN CALCULATING A FI NANCE CHARGE IN ACCO RDANCE WITH 31 14 HOUSE BILL 1211
593	593
594	594
595	595	THIS SECTION, A PROVIDER SHALL ASS UME THE MAXIMUM AMOU NT OF CREDIT 1
596	596	AVAILABLE TO THE REC IPIENT, IN EACH CASE , IS DRAWN AND HELD FO R THE 2
597	597	DURATION OF THE TERM OF THE DRAW PERIOD . 3
598	598
599	599	(C) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 4
600	600	A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR OPEN–END FINANCING : 5
601	601
602	602	(I) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE 6
603	603	RECIPIENT AND THE AMOU NT SCHEDULED TO BE D RAWN BY THE RECIPIEN T AT THE 7
604	604	TIME THE OFFER IS EX TENDED, IF ANY, MINUS ANY FEES DEDUC TED OR WITHHELD 8
605	605	AT DISBURSEMENT ; 9
606	606
607	607	(II) THE FINANCE CHARGE ; 10
608	608
609	609	(III) THE TOTAL REPAYMENT A MOUNT; 11
610	610
611	611	(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 12
612	612	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 13
613	613	ABBREVIATION “APR”; 14
614	614
615	615	(V) THE TERM OF THE PLAN , IF APPLICABLE, OR THE PERIOD 15
616	616	OVER WHICH A DRAW IS AMORTIZED; 16
617	617
618	618	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 17
619	619	PAYMENT FREQUENCY AN D AMOUNTS; 18
620	620
621	621	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 19
622	622	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 20
623	623	PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 21
624	624
625	625	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 22
626	626	REQUIREMENTS OR SECU RITY INTERESTS. 23
627	627
628	628	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 24
629	629	SHALL DISCLOSE : 25
630	630
631	631	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 26
632	632
633	633	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 27
634	634	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH. 28
635	635
636	636	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 29
637	637	SHALL DISCLOSE : 30 HOUSE BILL 1211 15
638	638
639	639
640	640
641	641	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 1
642	642	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 2
643	643
644	644	2. THE AMOUNT OF THE AVE RAGE PROJECTED 3
645	645	PAYMENTS PER MONTH . 4
646	646
647	647	(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 5
648	648	UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 6
649	649
650	650	(I) EXPRESSED AS A NOMINA L YEARLY RATE , INCLUSIVE OF 7
651	651	ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECI PIENT; 8
652	652
653	653	(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 9
654	654	IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 10
655	655
656	656	(III) BASED ON THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE 11
657	657	TO THE RECIPIENT AND THE TERM RESULTING F ROM MAKING THE MINIM UM 12
658	658	REQUIRED PAYMENTS AS DISCLOSED, REGARDLESS OF WHETHE R THE ACT OR 13
659	659	REGULATION WOULD REQ UIRE THE CALCULATION . 14
660	660
661	661	(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE OPEN–END 15
662	662	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 16
663	663	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUIRED TO 17
664	664	PAY: 18
665	665
666	666	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 19
667	667	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 20
668	668
669	669	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 21
670	670	CHARGE. 22
671	671
672	672	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 23
673	673	FINANCE CHARGES OTHER THAN T HE INTEREST ACCRUED SINCE THE RECIPIENT ’S 24
674	674	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 25
675	675	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 26
676	676	RECIPIENT COULD BE R EQUIRED TO PAY . 27
677	677
678	678	12–1109. 28
679	679
680	680	(A) (1) IN THIS SECTION THE FOLLOWIN G WORDS HAVE THE MEA NINGS 29
681	681	INDICATED. 30
682	682	16 HOUSE BILL 1211
683	683
684	684
685	685	(2) “FINANCE CHARGE ” INCLUDES A DISCOUNT TAKEN ON THE FACE 1
686	686	VALUE OF THE ACCOUNT S RECEIVABLE. 2
687	687
688	688	(3) “TOTAL PAYMENT AMOUNT ” MEANS THE PURCHASE A MOUNT OF 3
689	689	THE FACTORING TRANSA CTION PLUS THE FINAN CE CHARGE. 4
690	690
691	691	(B) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO A 5
692	692	RECIPIENT WHEN EXTEN DING A SPECIFIC OFFE R FOR A FACTORING TR ANSACTION: 6
693	693
694	694	(1) THE AMOUNT OF THE REC EIVABLES PURCHASE PR ICE PAID TO 7
695	695	THE RECIPIENT AND , IF DIFFERENT FROM TH E PURCHASE PRICE , THE 8
696	696	DISBURSEMENT AMOUNT AFTER ANY FEES DEDUC TED OR WITHHELD AT 9
697	697	DISBURSEMENT ; 10
698	698
699	699	(2) THE TOTAL PAYMENT AMO UNT; 11
700	700
701	701	(3) THE FINANCE CHARGE ; 12
702	702
703	703	(4) THE ANNUAL PERCENTAGE RATE OF THE FACTORIN G 13
704	704	TRANSACTION , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 14
705	705	ABBREVIATION “APR”, CALCULATED ACCORDING TO THE FEDERAL TRUTH IN 15
706	706	LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE 16
707	707	ADVANCE, SINGLE PAYMENT TRANS ACTION”; 17
708	708
709	709	(5) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND CHARGES 18
710	710	THAT CAN BE AVOIDED BY THE RECIPIENT; AND 19
711	711
712	712	(6) A DESCRIPTION OF THE R ECEIVABLES PURCHASED AND, IF 20
713	713	APPLICABLE, ANY ADDITIONAL COLLA TERAL REQUIREMENTS O R SECURITY 21
714	714	INTERESTS. 22
715	715
716	716	(C) (1) FOR PURPOSES OF THIS SUBSECTION, ANNUAL PERCENTAGE 23
717	717	RATE SHALL BE CALCUL ATED ACCORDING TO TH E FEDERAL TRUTH IN LENDING 24
718	718	ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE ADVANCE , 25
719	719	SINGLE PAYMENT TRANS ACTION”, REGARDLESS OF WHETHE R FEDERAL LAW OR 26
720	720	REGULATION WOULD REQ UIRE AN ANNUAL PERCE NTAGE RATE TO BE CAL CULATED 27
721	721	FOR A CERTAIN TRANSA CTION. 28
722	722
723	723	(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 29
724	724	PROVIDER SHALL USE T HE FOLLOWING INFORMA TION TO CALCULATE TH E 30
725	725	ESTIMATED ANNUAL PER CENTAGE RATE IN ACCO RDANCE WITH THIS SEC TION: 31
726	726
727	727	1. THE PURCHASE AMOUNT I S THE FINANCING AMOU NT; 32 HOUSE BILL 1211 17
728	728
729	729
730	730
731	731	2. THE PAYMENT AMOUNT IS THE PURCHASE AMOUNT 1
732	732	MINUS THE FINANCE CH ARGE; AND 2
733	733
734	734	3. THE TERM OF THE FACTO RING TRANSACTION IS 3
735	735	DETERMINED BY THE PA YMENT DUE DATE OF TH E RECEIVABLES . 4
736	736
737	737	(II) A PROVIDER MAY ESTIMAT E THE TERM FOR A FAC TORING 5
738	738	TRANSACTION AS THE AVERAGE PAYMENT PERI OD, USING HISTORICAL DAT A OVER 6
739	739	A PERIOD NOT TO EXCE ED THE PREVIOUS 12 MONTHS, CONCERNING PAYMENT 7
740	740	INVOICES PAID BY THE PARTY OWING THE ACCO UNTS RECEIVABLE IN Q UESTION. 8
741	741
742	742	12–1110. 9
743	743
744	744	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 10
745	745	DISBURSEMENT AMOUNT O F A COMMERCIAL FINAN CING TRANSACTION PLU S THE 11
746	746	FINANCE CHARGE . 12
747	747
748	748	(B) A PROVIDER MAY EXTEND A SPECIAL OFFER OF C OMMERCIAL 13
749	749	FINANCING THAT IS NO T AN OPEN–END FINANCING , CLOSED–END FINANCING , 14
750	750	SALES–BASED FINANCING , OR A FACTORING TRANS ACTION BUT OTHERWISE MEETS 15
751	751	THE DEFINITION OF CO MMERCIAL FINANCING U NDER THIS SUBTITLE . 16
752	752
753	753	(C) (1) IF A PROVIDER EXTENDS A SPECIAL OFFER THAT IS NOT AN 17
754	754	OPEN–END FINANCING , CLOSED–END FINANCING , SALES–BASED FINANCING , OR A 18
755	755	FACTORING TRANSACTIO N BUT OTHERWISE MEET S THE DEFINITION OF 19
756	756	COMMERCIAL FINANCING UNDER THIS SUBTITLE , THE PROVIDER SHALL D ISCLOSE: 20
757	757
758	758	(I) THE TOTAL AMOUNT OF T HE COMMERCIAL FINANC ING 21
759	759	INCLUDING THE DISBUR SEMENT AMOUNT , IF DIFFERENT FROM TH E FINANCING 22
760	760	AMOUNT, MINUS ANY FEES DEDUC TED OR WITHHELD AT DISBURSEMENT ; 23
761	761
762	762	(II) THE TOTAL REPAYMENT A MOUNT; 24
763	763
764	764	(III) THE FINANCE CHARGE ; 25
765	765
766	766	(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 26
767	767	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 27
768	768	ABBREVIATION “APR”, EXPRESSED AS A YEARL Y RATE, INCLUSIVE OF ANY FEES 28
769	769	AND FINANCE CHARGES , AND CALCULATED IN AC CORDANCE WITH THE RE LEVANT 29
770	770	SECTIONS OF THE FEDE RAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. § 30
771	771	1026.22 OR THIS ARTICLE, REGARDLESS OF WHETHE R THE ACT, THE REGULATION , 31
772	772	OR THIS ARTICLE WOUL D REQUIRE THE C ALCULATION; 32 18 HOUSE BILL 1211
773	773
774	774
775	775
776	776	(V) THE TERM OF THE COMME RCIAL FINANCING ; 1
777	777
778	778	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 2
779	779	PAYMENT FREQUENCY AN D AMOUNTS; 3
780	780
781	781	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 4
782	782	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING LATE PAYMENT 5
783	783	FEES AND RETURNED PA YMENT FEES; AND 6
784	784
785	785	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 7
786	786	REQUIREMENTS OR SECU RITY INTERESTS. 8
787	787
788	788	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 9
789	789	SHALL DISCLOSE : 10
790	790
791	791	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 11
792	792
793	793	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 12
794	794	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 13
795	795
796	796	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 14
797	797	SHALL DISCLOSE : 15
798	798
799	799	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 16
800	800	METHOD USED TO CALCULATE THE AMO UNTS AND FREQUENCY O F PAYMENTS; AND 17
801	801
802	802	2. THE AMOUNT OF THE AVE RAGE PROJECTED 18
803	803	PAYMENTS PER MONTH . 19
804	804
805	805	(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE COMMERCIAL 20
806	806	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 21
807	807	PROVIDER S HALL DISCLOSE WHETHE R THE RECIPIENT WOUL D BE REQUIRED TO 22
808	808	PAY: 23
809	809
810	810	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 24
811	811	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 25
812	812
813	813	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 26
814	814	CHARGE. 27
815	815
816	816	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 28
817	817	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 29 HOUSE BILL 1211 19
818	818
819	819
820	820	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 1
821	821	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 2
822	822	RECIPIENT COULD BE REQUIRE D TO PAY. 3
823	823
824	824	12–1111. 4
825	825
826	826	(A) A PROVIDER MAY REQUIRE A RECIPIENT TO PAY O FF THE BALANCE OF 5
827	827	AN EXISTING COMMERCI AL FINANCING TRANSAC TION FROM THE SAME P ROVIDER 6
828	828	AS A CONDITION OF OB TAINING A NEW OR REN EWAL COMMERCIAL FINA NCING 7
829	829	TRANSACTION . 8
830	830
831	831	(B) IF A PROVIDER REQUIRE S A RECIPIENT TO PAY OFF A COMMERCIAL 9
832	832	FINANCING TRANSACTIO N BEFORE OBTAINING A NEW OR RENEWAL COMME RCIAL 10
833	833	FINANCING TRANSACTIO N, THE PROVIDER SHALL D ISCLOSE: 11
834	834
835	835	(1) THE AMOUNT OF THE NEW OR RENEWAL COMMERCIA L FINANCING 12
836	836	THAT WILL BE USED TO PAY OFF THE PORTION OF THE EXIST ING COMMERCIAL 13
837	837	FINANCING THAT CONSI STS OF ANY REQUIRED PREPAYMENT CHARGES ; AND 14
838	838
839	839	(2) ANY UNPAID INTEREST T HAT WAS NOT FORGIVEN AT THE TIME 15
840	840	THE NEW OR RENEWAL C OMMERCIAL FINANCING WAS ENTERED INTO . 16
841	841
842	842	(C) (1) FOR FINANCING FOR WHICH THE TOTAL REPAYMENT AMOU NT IS 17
843	843	CALCULATED AS A FIXE D AMOUNT, THE PREPAYMENT CHARG E IS EQUAL TO THE 18
844	844	ORIGINAL FINANCE CHA RGE MULTIPLIED BY TH E AMOUNT OF THE NEW OR 19
845	845	RENEWAL COMMERCIAL F INANCING USED TO PAY OFF THE EXISTING COM MERCIAL 20
846	846	FINANCING TRANSACTION AS A PER CENTAGE OF THE TOTAL REPAYMENT AMOUNT , 21
847	847	MINUS ANY PORTION OF THE TOTAL REPAYMENT AMOUNT FORGIVEN BY T HE 22
848	848	PROVIDER AT THE TIME OF PREPAYMENT . 23
849	849
850	850	(2) IF THE PREPAYMENT CHA RGE IS MORE THAN ZER O, THE 24
851	851	PROVIDER SHALL RECOR D THE AMOUNT AS THE ANSWER TO THE FOLLOWIN G 25
852	852	QUESTION: 26
853	853
854	854	“DOES THE NEW OR RENEW AL COMMERCIAL FINANC ING TRANSACTION INCL UDE 27
855	855	ANY AMOUNT THAT IS U SED TO PAY UNPAID FI NANCE CHARGE OR FEES , ALSO 28
856	856	KNOWN AS DOUBLE DIPP ING? YES, [ENTER AMOUNT ]”. 29
857	857
858	858	(D) IF THE DISBURSEMENT A MOUNT OF THE NEW OR RENEWAL 30
859	859	COMMERCIAL FINANCING TRANSACTION WILL BE REDUCED TO PAY DOWN ANY 31
860	860	UNPAID PORTION OF TH E OUTSTANDING BALANC E OF THE EXISTING CO MMERCIAL 32
861	861	FINANCING, THE PROVIDER SHALL D ISCLOSE THE ACTUAL D OLLAR AMOUNT BY 33
862	862	WHICH THE DISBURSEME NT AMOUNT WILL BE RE DUCED. 34 20 HOUSE BILL 1211
863	863
864	864
865	865
866	866	12–1112. 1
867	867
868	868	A RECIPIENT SHALL SIGN , MANUALLY OR ELECTRON ICALLY, EACH 2
869	869	APPLICABLE DISCLOSUR E REQUIRED UNDER THI S SUBTITLE BEFORE A PROVIDER 3
870	870	MAY ALLOW THE RECIPI ENT TO PROCEED WITH THE COMMERCIAL FINAN CING 4
871	871	APPLICATION. 5
872	872
873	873	12–1113. 6
874	874
875	875	(A) (1) NOTHING IN THIS SUBTITLE MAY BE CONS TRUED TO PREVENT A 7
876	876	PROVIDER FROM DISCLO SING ADDITIONAL INFO RMATION TO A RECIPIE NT 8
877	877	REGARDING A COMMERCI AL FINANCING TRANSAC TION. 9
878	878
879	879	(2) IF A PROVIDER PROVIDE S ADDITIONAL DISCLOS URES TO A 10
880	880	RECIPIENT OTHER THAN WHAT IS REQUIRED BY THIS SUBTITLE, THE ADDITIONAL 11
881	881	DISCLOSURE IS NOT CO NSIDERED A REQUIRED DISCLOSURE UNDER THI S SUBTITLE. 12
882	882
883	883	(B) (1) IF ADDITIONAL METRICS OF FINANCING COSTS A RE DISCLOSED 13
884	884	OR USED IN THE APPLI CATION PROCESS FOR C OMMERCIAL FINANCING , THE 14
885	885	ADDITIONAL METRICS M AY NOT BE PRE SENTED AS A RATE IF THEY ARE NOT THE 15
886	886	ANNUAL INTEREST RATE OR THE ANNUAL PERCEN TAGE RATE. 16
887	887
888	888	(2) THE TERM “INTEREST”, WHEN USED TO DESCRIB E A PERCENTAGE 17
889	889	RATE, MAY BE USED ONLY TO DESCRIBE ANNUALIZED PERCENTAGE RATES , 18
890	890	INCLUDING THE ANNUAL INTEREST RATE . 19
891	891
892	892	(C) IF A PROVIDER STATES A RATE OF FINANCE CH ARGE OR A FINANCING 20
893	893	AMOUNT TO A RECIPIEN T DURING THE APPLICA TION PROCESS FOR COM MERCIAL 21
894	894	FINANCING, THE PROVIDER SHALL A LSO STATE THE RATE A S AN “ANNUAL 22
895	895	PERCENTAGE RATE ”, USING THAT TERM OR T HE ABBREVIATION “APR”. 23
896	896
897	897	12–1114. 24
898	898
899	899	TO CARRY OUT THIS SUB TITLE, THE COMMISSIONER SHALL AD OPT 25
900	900	REGULATIONS SUBSTANT IALLY THE SAME AS RE GULATIONS ADOPTED BY THE NEW 26
901	901	YORK STATE DEPARTMENT OF FINANCIAL SERVICES REGARDING CO MMERCIAL 27
902	902	FINANCING. 28
903	903
904	904	12–1115. 29
905	905
906	906	(A) A VIOLATION OF THIS SU BTITLE IS AN UNFAIR, ABUSIVE, OR DECEPTIVE 30
907	907	TRADE PRACTICE WITHI N THE MEANING OF TITLE 13 OF THE COMMERCIAL LAW 31 HOUSE BILL 1211 21
908	908
909	909
910	910	ARTICLE AND IS SUBJEC T TO THE ENFORCEMENT AND PENALTY PROVISIO NS 1
911	911	CONTAINED IN TITLE 13 OF THE COMMERCIAL LAW ARTICLE. 2
912	912
913	913	(B) (1) THE COMMISSIONER SH ALL IMPOSE A CIVIL P ENALTY, NOT 3
914	914	EXCEEDING: 4
915	915
916	916	(I) $ 2,000, FOR EACH VIOLATION O F THIS SUBTITLE; AND 5
917	917
918	918	(II) $10,000, FOR EACH WILLFUL VIO LATION OF THIS SUBTI TLE. 6
919	919
920	920	(2) THE COMMISSIONER MAY ORDE R ADDITIONAL RELIEF , 7
921	921	INCLUDING RESTITUTIO N OR A PERMANENT OR PRELIMINARY INJUNCTI ON ON 8
922	922	BEHALF OF A RECIPIEN T AFFECTED BY A VIOL ATION OF THIS SUBTIT LE. 9
923	923
924	924	(C) IF A COMPLAINT ABOUT A VIOLATION OF THIS SUBTITLE IS FILED WI TH 10
925	925	THE COMMISSIONER , THE COMMISSIONER MAY INVE STIGATE THE COMPLAIN T AND 11
926	926	USE ANY OF THE INVESTIGATIVE AND EN FORCEMENT POWERS PRO VIDED UNDER 12
927	927	TITLE 2, SUBTITLE 1 OF THIS ARTICLE. 13
928	928
929	929	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
930	930	October 1, 2022. 15
931	931