EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1211*
HOUSE BILL 1211
I1, I2 2lr2030
CF SB 825
By: Delegates Crosby and Howard
Introduced and read first time: February 11, 2022
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Consumer Credit – Commercial Financing Transactions 2
FOR the purpose of requiring that certain revenue, fees, and examination and investigation 3
fees and assessments relating to commercial financing transactions be credited to 4
the Nondepository Special Fund; regulating commercial financing transactions, 5
including by establishing requirements related to disclosures, calculations of annual 6
percentage rates, terms of repayments, and other related items, and the extension of 7
special offers; making a violation of this Act an unfair, abusive, or deceptive trade 8
practice under the Maryland Consumer Protection Act and subject to certain 9
enforcement and penalty provisions; and generally relating to commercial financing 10
transactions. 11
BY repealing and reenacting, with amendments, 12
Article – Commercial Law 13
Section 13–301(14)(xxxiv) and (xxxv) 14
Annotated Code of Maryland 15
(2013 Replacement Volume and 2021 Supplement) 16
BY adding to 17
Article – Commercial Law 18
Section 13–301(14)(xxxvi) 19
Annotated Code of Maryland 20
(2013 Replacement Volume and 2021 Supplement) 21
BY repealing and reenacting, with amendments, 22
Article – Financial Institutions 23
Section 11–610(a)(13)(i), (b)(1), and (c) 24
Annotated Code of Maryland 25
(2020 Replacement Volume and 2021 Supplement) 26
BY adding to 27 2 HOUSE BILL 1211
Article – Financial Institutions 1
Section 12–1101 through 12–1115 to be under the new subtitle “Subtitle 11. 2
Commercial Financing” 3
Annotated Code of Maryland 4
(2020 Replacement Volume and 2021 Supplement) 5
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
That the Laws of Maryland read as follows: 7
Article – Commercial Law 8
13–301. 9
Unfair, abusive, or deceptive trade practices include any: 10
(14) Violation of a provision of: 11
(xxxiv) The federal Servicemembers Civil Relief Act; [or] 12
(xxxv) [§] SECTION 11–210 of the Education Article; or 13
(XXXVI) TITLE 12, SUBTITLE 11 OF THE FINANCIAL 14
INSTITUTIONS ARTICLE; OR 15
Article – Financial Institutions 16
11–610. 17
(a) There is a Nondepository Special Fund that consists of: 18
(13) (i) Any other fee, examination or investigation fee or assessment, or 19
revenue received by the Commissioner under this subtitle, Subtitles 2, 3, 4, and 5 of this 20
title, Title 12, Subtitles 1, 4, 9, and 10 of this article, Title 12, [Subtitle] SUBTITLES 12 21
AND 14 of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial 22
Law Article; and 23
(b) Notwithstanding subsection (a) of this section: 24
(1) The Commissioner shall pay all fines and penalties collected by the 25
Commissioner under Title 2, Subtitle 1 of this article, this subtitle, Subtitles 2, 3, 4, and 5 26
of this title, Title 12, Subtitles 1, 4, 9, [and] 10, AND 11 of this article, Title 12, Subtitle 14 27
of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial Law 28
Article into the General Fund of the State; and 29
HOUSE BILL 1211 3
(c) The purpose of the Fund is to cover the direct and indirect costs of fulfilling 1
the statutory and regulatory duties of the Commissioner and the State Collection Agency 2
Licensing Board related to: 3
(1) Title 2, Subtitle 1 of this article; 4
(2) This subtitle; 5
(3) Subtitle 2 of this title; 6
(4) Subtitle 3 of this title; 7
(5) Subtitle 4 of this title; 8
(6) Subtitle 5 of this title; 9
(7) Title 12, Subtitle 1 of this article; 10
(8) Title 12, Subtitle 4 of this article; 11
(9) Title 12, Subtitle 9 of this article; 12
(10) Title 12, Subtitle 10 of this article; 13
(11) TITLE 12, SUBTITLE 11 OF THIS ARTICLE; 14
[(11)] (12) Title 7 of the Business Regulation Article; 15
[(12)] (13) Title 12 of the Commercial Law Article; 16
[(13)] (14) Title 14, Subtitles 12, 19, and 42 of the Commercial Law Article; 17
[(14)] (15) Title 7, Subtitles 1, 3, 4, and 5 of the Real Property Article; 18
[(15)] (16) Title 26, Subtitle 6 of the Education Article; and 19
[(16)] (17) Any other expense authorized in the State budget. 20
SUBTITLE 11. COMMERCIAL FINANCING. 21
12–1101. 22
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 23
INDICATED. 24
(B) (1) “CLOSED–END FINANCING ” MEANS A CLOSED –END EXTENSION OF 25 4 HOUSE BILL 1211
CREDIT, SECURED OR UNSECURED , INCLUDING EQUIPMENT FINANCING, THAT: 1
(I) DOES NOT MEET THE DEF INITION OF A LEASE U NDER 2
ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE; AND 3
(II) THE PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND 4
TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 5
(2) “CLOSED–END FINANCING ” INCLUDES FINANCING T HAT HAS AN 6
ESTABLISHED PRINCIPA L AMOUNT AND DURATIO N. 7
(C) “COMMERCIAL FINANCING ” MEANS OPEN –END FINANCING , 8
CLOSED–END FINANCING , SALES–BASED FINANCING , A FACTORING TRANSACT ION, 9
OR ANOTHER FORM OF FI NANCING, THE PROCEEDS OF WHIC H THE RECIPIENT DOES 10
NOT INTEND TO USE PR IMARILY FOR PERSONAL , FAMILY, OR HOUSEHOLD 11
PURPOSES. 12
(D) “FACTORING TRANSACTION ” MEANS AN ACCOUNTS RE CEIVABLE 13
PURCHASE TRANSACTION : 14
(1) THAT INCLUDES AN AGRE EMENT TO PURCHASE , TRANSFER, OR 15
SELL A LEGALLY ENFOR CEABLE CLAIM FOR PAY MENT HELD BY A RECIP IENT FOR 16
GOODS THE RECIPIENT HAS SUPPLIED OR SERV ICES THE RECIPIENT H AS RENDERED 17
THAT HAVE BEEN ORDER ED BUT FOR WHICH PAY MENT HAS NOT BEEN MA DE; AND 18
(2) THE PROCEED S OF WHICH THE RECIP IENT DOES NOT INTEND TO 19
USE PRIMARILY FOR PE RSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 20
(E) (1) “FINANCE CHARGE ” MEANS THE COST OF CO MMERCIAL 21
FINANCING REPRESENTE D AS A DOLLAR AMOUNT . 22
(2) “FINANCE CHARGE ” INCLUDES: 23
(I) A CHARGE PAYA BLE DIRECTLY OR INDI RECTLY BY A 24
RECIPIENT AND IMPOSE D DIRECTLY OR INDIRE CTLY BY A PROVIDER A S AN 25
INCIDENT TO OR A CON DITION OF THE EXTENS ION OF COMMERCIAL FI NANCING; 26
(II) A CHARGE THAT WOULD BE INCLUDED UNDER 12 C.F.R. 27
PART 1026.4 IF A TRANSACTION WER E SUBJECT TO 12 C.F.R. PART 1026.4; AND 28
(III) ANY ADDITIONAL CHARGE S DETERMINED BY THE 29
COMMISSIONER . 30
HOUSE BILL 1211 5
(F) (1) “OPEN–END FINANCING ” MEANS AN AGREEMENT F OR ONE OR 1
MORE EXTENSIONS OF S ECURED OR UNSECURED OPEN–END CREDIT , THE 2
PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND TO U SE PRIMARILY FOR 3
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 4
(2) “OPEN–END FINANCING ” INCLUDES CREDIT EXTE NDED BY A 5
PROVIDER UNDER A PLA N IN WHICH: 6
(I) THE PROVIDER REASONAB LY CONTEMPLATES REPE ATED 7
TRANSACTIONS ; 8
(II) THE PROVID ER MAY IMPOSE A FINA NCE CHARGE ON AN 9
OUTSTANDING UNPAID B ALANCE; AND 10
(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO A 11
RECIPIENT DURING THE TERM OF THE PLAN , UP TO A LIMIT THAT T HE PROVIDER 12
SETS, IS GENERALLY MADE AV AILABLE TO THE EXTEN T THAT ANY OU TSTANDING 13
BALANCE IS REPAID . 14
(G) (1) “PROVIDER” MEANS A PERSON THAT EXTENDS A SPECIFIC O FFER 15
OF COMMERCIAL FINANC ING TO A RECIPIENT . 16
(2) “PROVIDER” INCLUDES A PERSON TH AT SOLICITS AND PRES ENTS 17
A SPECIFIC OFFER OF COMMERCIAL FINANCING ON BEHALF OF A TH IRD PARTY. 18
(H) (1) “RECIPIENT” MEANS A PERSON , OR THE PERSON ’S AUTHORIZED 19
REPRESENTATIVE , THAT APPLIES FOR COM MERCIAL FINANCING AN D IS MADE A 20
SPECIFIC OFFER OF CO MMERCIAL FINANCING B Y A PROVIDER. 21
(2) “RECIPIENT” DOES NOT INCLUDE A P ERSON ACTING AS A 22
BROKER. 23
(I) (1) “SALES–BASED FINANCING ” MEANS A TRANSACTION : 24
(I) THAT IS REPAID BY A RECIPIENT TO A PROVID ER OVER TIME 25
AS A PERCENTAGE OF S ALES OR REVENUE , IN WHICH THE PAYMENT AMOUNT MAY 26
INCREASE OR DECREASE ACCORDING TO THE VOL UME OF SALES MADE OR REVENUE 27
RECEIVED BY THE RECI PIENT; AND 28
(II) THE PROCEEDS OF WHICH THE RECIPIENT DOES N OT 29
INTEND TO USE PRIMAR ILY FOR PERSONAL , FAMILY, OR HOUSEHOLD PURPOSE S. 30
(2) “SALES–BASED FINANCING ” INCLUDES A TRANSACTI ON 31 6 HOUSE BILL 1211
CONTAINING A TRUE –UP MECHANISM UNDER W HICH THE FINANCING IS R EPAID AS 1
A FIXED PAYMENT BUT PROVIDES FOR A RECON CILIATION PROCESS TH AT ADJUSTS 2
THE PAYMENT TO AN AM OUNT THAT IS A PERCE NTAGE OF SALES OR RE VENUE. 3
(J) “SPECIFIC OFFER ” MEANS THE TERMS OF C OMMERCIAL FINANCING 4
THAT ARE QUOTED TO A RECIPIENT, BASED ON INFORMATION OBTAINED FROM OR 5
ABOUT THE RECIPIENT , WHICH IF ACCEPTED BY THE RECIPIENT ARE BI NDING ON A 6
PROVIDER, AS APPLICABLE, SUBJECT TO REQUIREME NTS STATED IN THE TE RMS OF 7
THE COMMERCIAL FINAN CING. 8
12–1102. 9
THIS SUBTITLE DOES NO T APPLY TO: 10
(1) A FINANCIAL INSTITUTIO N; 11
(2) A PERSON ACTING AS A T ECHNOLOGY SERVICES P ROVIDER TO AN 12
ENTITY EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE ENTIT Y’S 13
COMMERCIAL FINANCING PROGRAM IF THE PERSO N DOES NOT HAVE AN I NTEREST, 14
ARRANGEMENT , OR AGREEM ENT TO PURCHASE ANY INTEREST IN THE COMM ERCIAL 15
FINANCING EXTENDED B Y THE ENTITY IN CONN ECTION WITH THE COMM ERCIAL 16
FINANCING PROGRAM ; 17
(3) A LENDER REGULATED UND ER THE FEDERAL FARM CREDIT ACT; 18
(4) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL 19
PROPERTY; 20
(5) A LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM 21
COMMERCIAL CODE; 22
(6) A PROVIDER OR OTHER PE RSON WHO MAKES NO MO RE THAN FIVE 23
COMMERCIAL FINANCING TRANSACTIONS IN THE STATE IN A 12–MONTH PERIOD ; 24
(7) A COMMERCIAL FINANCING TRANSACTION OVER $2,500,000; OR 25
(8) A COMMERCIAL FINANCING TRANSACTION : 26
(I) IN WHICH THE RECIPIEN T IS: 27
1. A DEALER, OR AN AFFILIATE OF A DEALER, AS 28
DEFINED IN § 11–111 OF THE TRANSPORTATION ARTICLE; OR 29
HOUSE BILL 1211 7
2. A RENTAL VEHICLE COMPA NY, OR AN AFFILIATE OF A 1
RENTAL VEHICLE COMPA NY, AS DEFINED IN § 18–108 OF THE TRANSPORTATION 2
ARTICLE; AND 3
(II) MADE UNDER A COMMERCI AL FINANCING AGREEME NT OR 4
COMMERCIAL OPEN –END CREDIT PLAN OF A T LEAST $50,000, INCLUDING A 5
COMMERCIAL LOAN MADE IN ACCORDANCE WITH T HE COMMERCIAL FINANCING 6
TRANSACTION . 7
12–1103. 8
(A) (1) FOR PURPOSES OF DETER MINING WHETHER A FIN ANCING 9
TRANSACTION IS A COM MERCIAL FINANCING TR ANSACTION, A PROVIDER MAY RELY 10
ON A STATEMENT OF IN TENDED PURPOSE MADE BY A RECIPIENT. 11
(2) A RECIPIENT’S STATEMENT OF INTENDED PURP OSE MAY BE: 12
(I) CONTAINED IN THE COMM ERCIAL FINANCING 13
APPLICATION, COMMERCIAL FINANCING AGREEMENT , OR OTHER DOCUMENT 14
SIGNED OR CONSENTED TO BY THE RECIPIENT ; 15
(II) A SEPARATE STATEMENT S IGNED, MANUALLY OR 16
ELECTRONICALLY , BY THE RECIPIENT; OR 17
(III) IF DOCUMENTED IN THE RECIPIENT’S APPLICATION FILE , 18
PROVIDED ORALLY BY T HE RECIPIENT. 19
(B) A PROVIDER MAY NOT BE REQUIRED TO VERIFY T HAT THE PROCEEDS 20
OF A COMMERCIAL FINA NCING TRANSACTION AR E BEING USED IN ACCO RDANCE 21
WITH A RECIPIENT ’S STATEMENT OF INTEN DED PURPOSE . 22
(C) THE EXTENSION OF A SP ECIFIC OFFER OR PROV ISION OF DISCLOSURES 23
FOR COMMERCIAL FINAN CING BY A PROVIDER , IN AND OF ITSELF , MAY NOT BE 24
CONSTRUED TO MEAN TH AT THE PROVIDER IS O RIGINATING, MAKING, FUNDING, OR 25
PROVIDING COM MERCIAL FINANCING . 26
12–1104. 27
(A) EXCEPT AS PROVIDED IN § 12–1108 OF THIS SUBTITLE , FOR PURPOSES 28
OF THIS SUBTITLE, AN ANNUAL PERCENTAGE RATE SHALL BE: 29
(1) EXPRESSED AS A YEARLY RATE, INCLUDING ALL FEES A ND 30
FINANCE CHARGES ; AND 31 8 HOUSE BILL 1211
(2) CALCULATED IN ACCO RDANCE WITH THE FEDE RAL TRUTH IN 1
LENDING ACT. 2
(B) IN ADDITION TO THE RE QUIREMENTS OF SUBSEC TION (A)(2) OF THIS 3
SECTION, AN ANNUAL PERCENTAGE RATE SHALL BE CALCUL ATED BASED ON THE 4
ESTIMATED TERM OF RE PAYMENT AND THE PROJ ECTED PERIODIC PAYME NT 5
AMOUNTS OF A COMMERCIAL FINANCING TRANSACTION , REGARDLESS OF WHETHE R 6
FEDERAL LAW OR REGUL ATION WOULD REQUIRE AN ANNUAL PERCENTAGE RATE TO 7
BE CALCULATED FOR A CERTAIN TRANSACTION . 8
12–1105. 9
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 10
INDICATED. 11
(2) “ESTIMATED TERM OF REP AYMENT” MEANS THE AMOUNT OF 12
TIME REQUIRED FOR TH E PERIODIC PAYMENTS MADE BY A RECIPIENT IN A 13
SALES–BASED FINANCING TRAN SACTION TO EQUAL THE TOTAL AMOUNT REQUIRE D 14
TO BE REPAID. 15
(3) “TOTAL REPAYMENT AMOUN T” MEANS THE DISBURSEME NT 16
AMOUNT OF A SALES –BASED FINANCING TRAN SACTION PLUS THE FIN ANCE CHARGE . 17
(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 18
A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER OF SALES–BASED FINANCING : 19
(I) THE TOTAL AMOUNT OF T HE SALES–BASED FINANCING AND 20
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 21
MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 22
(II) THE FINANCE CHARGE ; 23
(III) THE ESTIMATED ANNUAL PERCENTAGE RATE OF T HE 24
SALES–BASED FINANCING , USING THE WORDS “ANNUAL PERCENTAGE RATE ” OR THE 25
ABBREVIATION “APR”; 26
(IV) THE TOTAL REPAYMENT A MOUNT; 27
(V) THE ESTIMATED TERM OF REPAYMENT ; 28
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 29
PROJECTED PERIODIC P AYMENT AMOUNTS ; 30 HOUSE BILL 1211 9
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 1
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 2
PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 3
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 4
REQUIREMENTS OR SECU RITY INTERESTS. 5
(2) (I) FOR PAYMENT AMOUNTS THAT ARE FIXED , A PROVIDER 6
SHALL DISCLOSE : 7
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 8
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 9
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 10
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 11
SHALL DISCLOSE : 12
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 13
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 14
2. THE AMOUNT OF THE AVE RAGE PROJECTED 15
PAYMENTS PER MONTH . 16
(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES T HE SALES–BASED 17
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 18
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 19
PAY: 20
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 21
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 22
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 23
CHARGE. 24
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 25
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 26
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 27
PORTION OF THE FINANC E CHARGE AND THE MAX IMUM DOLLAR AMOUNT T HE 28
RECIPIENT COULD BE R EQUIRED TO PAY . 29
12–1106. 30 10 HOUSE BILL 1211
(A) (1) A PROVIDER SHALL USE T HE PROJECTED SALES V OLUME OF A 1
RECIPIENT TO CALCULA TE THE FOLLOWING INF ORMATION RELATED TO A 2
SALES–BASED FINANCING TRANSACTION : 3
(I) THE ESTIMATED TERM OF REPAYMENT AND THE 4
PROJECTED PAYMENT AM OUNTS OF A SALES–BASED FINANCING TRAN SACTION; AND 5
(II) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A 6
SALES–BASED FINANCING TRAN SACTION. 7
(2) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A SALES–BASED 8
FINANCING TRANSACTIO N SHALL BE CALCULATE D: 9
(I) IN ACCORDANCE WITH TH E FEDERAL TRUTH IN LENDING 10
ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 11
(II) BASED ON THE ESTIMATE D TERM OF REPAYMENT AND 12
PROJECTED SALES VOLU ME OF A RECIPIENT. 13
(B) (1) A PROVIDER MAY CALCULA TE THE PROJECTED SAL ES VOLUME OF 14
A RECIPIENT USING EI THER THE HISTORICAL METHOD OR THE OPT –IN METHOD. 15
(2) (I) A PROVIDER THAT USES T HE HISTORICAL METHOD TO 16
CALCULATE THE PROJEC TED SALES VOLUME OF A RECIPIENT SHALL USE AN 17
AVERAGE HISTORICAL V OLUME OF SALES OR RE VENUE. 18
(II) A PROVIDER SHALL FIX T HE HISTORICAL TIME P ERIOD 19
USED TO CALCULATE TH E AVERAGE HISTORICAL VOLUME AND USE THE S AME TIME 20
PERIOD FOR ALL DISCL OSURE PURPOSES FOR A NY SALES–BASED FINANCING 21
TRANSACTION PRODUCTS OFFERED. 22
(III) EXCEPT AS PROVIDED IN SUBPARAGRAPH (IV) OF THIS 23
PARAGRAPH , THE FIXED HISTORICAL TIME PERIOD: 24
1. MAY NOT BE LESS THAN 1 MONTH AND MAY NOT 25
EXCEED 12 MONTHS; AND 26
2. SHALL BE THE TIME PER IOD DIRECTLY BEFORE THE 27
SPECIFIC OFFER WAS M ADE. 28
(IV) A PROVIDER MAY CHOOSE TO USE THE AVERAGE S ALES FOR 29
THE SAME NUMBER OF M ONTHS AS THE PROVIDE R WOULD HAVE USED UN DER 30 HOUSE BILL 1211 11
PARAGRAPH (3) OF THIS SUBSECTION W ITH THE HIGHEST SALE S VOLUME WITHIN 1
THE PAST 12 MONTHS. 2
(3) A PROVIDER MAY USE THE OPT –IN METHOD TO DETERMI NE THE 3
INFORMATION LISTED U NDER SUBSECTION (A)(1) OF THIS SECTION BY U SING A 4
PROJECTED SALES VOLU ME THAT THE PROVIDER CHOOSES FOR EACH DIS CLOSURE 5
IF THE RECIPIENT PAR TICIPATES IN A REVIE W PROCESS ESTABLISHE D BY THE 6
COMMISSIONER. 7
(C) A PROVIDER SHALL NOTIF Y THE COMMISSIONER WHICH OF THE TWO 8
METHODS THE PROVIDER INTENDS TO USE WHEN CALCULATING THE ESTI MATED 9
ANNUAL PERCENTAGE OF EACH SALES–BASED FINANCING TRAN SACTION. 10
(D) (1) ON OR BEFORE JANUARY 1 EACH YEAR, A PROVIDER SHALL 11
REPORT TO THE COMMISSIONER ON : 12
(I) THE ESTIMATED ANNUAL PERCENTAGE RATES GIV EN TO 13
EACH RECIPIENT ; AND 14
(II) THE ACTUAL ANNUAL PER CENTAGE RATES OF EAC H 15
COMPLETED SALES –BASED FINANCING TRAN SACTION. 16
(2) (I) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 17
SUBSECTION SHALL CON TAIN ANY INFORMATION THE COMMISSIONER CONSIDER S 18
NECESSARY TO DETERMI NE WHETHER THE DEVIA TION BETWEEN THE EST IMATED 19
ANNUAL PERCENTAGE RA TES AND ACTUAL ANNUA L PERCENTAGE RATES O F 20
COMPLETED SALES –BASED FINANCING TRAN SACTIONS IS REASONABLE . 21
(II) THE COMMISSIONER MAY CONS IDER EXTRAORDINARY 22
CIRCUMSTANCES WHEN D ETERMINING WHETHER T HE PROVIDER ’S DEVIATION 23
BETWEEN THE ESTIMATE D ANNUAL PERCENTAGE RATE AND ACTUAL ANNU AL 24
PERCENTAGE RATE OF A SALES–BASED FINANCING TRAN SACTION IS REAS ONABLE. 25
(III) IF THE COMMISSIONER FINDS TH AT THERE WAS AN 26
UNREASONABLE DEVIATI ON BETWEEN ESTIMATED AND ACTUAL ANNUAL 27
PERCENTAGE RATES OF SALES–BASED FINANCING TRAN SACTIONS, THE 28
COMMISSIONER MAY REQU IRE THE PROVIDER TO USE THE HISTORICAL M ETHOD 29
INSTEAD OF THE OPT–IN METHOD IN DETERMI NING THE PROJECTED S ALES VOLUME 30
OF THE RECIPIENT . 31
12–1107. 32
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 33 12 HOUSE BILL 1211
DISBURSEMENT AMOUNT OF A CLOSED–END FINANCING TRANSA CTION PLUS THE 1
FINANCE CHARGE . 2
(B) (1) A PROVIDER SHA LL DISCLOSE THE FOLL OWING INFORMATION TO 3
A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR CLOSED –END FINANCING : 4
(I) THE TOTAL AMOUNT OF T HE CLOSED–END FINANCING AND 5
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 6
MINUS ANY FEES DEDUC TED OR WITHHELD AT DISBU RSEMENT; 7
(II) THE TOTAL REPAYMENT A MOUNT; 8
(III) THE FINANCE CHARGE ; 9
(IV) THE ANNUAL PERCENTAGE RATE OF THE CLOSED –END 10
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 11
ABBREVIATION “APR”; 12
(V) THE TERM OF THE FINANCING; 13
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 14
PROJECTED PERIODIC P AYMENT AMOUNTS ; 15
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 16
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 17
PAYMENT FEES , AND RETURNE D PAYMENT FEES ; AND 18
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 19
REQUIREMENTS OR SECU RITY INTERESTS. 20
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 21
SHALL DISCLOSE : 22
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 23
2. IF THE PAYMENT F REQUENCY IS OTHER TH AN 24
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 25
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 26
SHALL DISCLOSE : 27
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 28
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 29 HOUSE BILL 1211 13
2. THE AMOUNT OF THE AVE RAGE PROJECTED 1
PAYMENTS PER MONTH . 2
(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 3
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 4
(I) EXPRESSED AS A YEARLY RATE, INCLUSIVE OF ANY FEES 5
AND FINANCE CHARGES THAT CANNOT BE AVOID ED BY A RECIPIENT ; AND 6
(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 7
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22, REGARDLESS OF 8
WHETHER THE ACT OR REGULATION WOU LD REQUIRE THE CALCU LATION. 9
(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE CLOSED–END 10
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 11
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 12
PAY: 13
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 14
ACCRUED SINCE THE RECIPIENT ’S LAST PAYMENT ; AND 15
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 16
CHARGE. 17
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 18
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 19
LAST PAYMENT , A PROVIDER SHALL DISCL OSE THE PERCENTAGE O F ANY UNPAID 20
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 21
RECIPIENT COULD BE R EQUIRED TO PAY . 22
12–1108. 23
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE DRAW 24
AMOUNT OF THE OPEN –END FINANCING T RANSACTION, MINUS ANY FEES DEDUC TED 25
OR WITHHELD AT DISBU RSEMENT, PLUS THE FINANCE CHA RGE. 26
(B) (1) WHEN CALCULATING THE TOTAL REPAYMENT AMOU NT IN 27
ACCORDANCE WITH THIS SECTION, A PROVIDER SHALL ASS UME A DRAW AMOUNT 28
EQUAL TO THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE TO THE RECIPI ENT IF 29
DRAWN AND HELD FOR T HE DURATION OF THE T ERM OR DRAW PERIOD . 30
(2) WHEN CALCULATING A FI NANCE CHARGE IN ACCO RDANCE WITH 31 14 HOUSE BILL 1211
THIS SECTION, A PROVIDER SHALL ASS UME THE MAXIMUM AMOU NT OF CREDIT 1
AVAILABLE TO THE REC IPIENT, IN EACH CASE , IS DRAWN AND HELD FO R THE 2
DURATION OF THE TERM OF THE DRAW PERIOD . 3
(C) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 4
A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR OPEN–END FINANCING : 5
(I) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE 6
RECIPIENT AND THE AMOU NT SCHEDULED TO BE D RAWN BY THE RECIPIEN T AT THE 7
TIME THE OFFER IS EX TENDED, IF ANY, MINUS ANY FEES DEDUC TED OR WITHHELD 8
AT DISBURSEMENT ; 9
(II) THE FINANCE CHARGE ; 10
(III) THE TOTAL REPAYMENT A MOUNT; 11
(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 12
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 13
ABBREVIATION “APR”; 14
(V) THE TERM OF THE PLAN , IF APPLICABLE, OR THE PERIOD 15
OVER WHICH A DRAW IS AMORTIZED; 16
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 17
PAYMENT FREQUENCY AN D AMOUNTS; 18
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 19
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 20
PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 21
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 22
REQUIREMENTS OR SECU RITY INTERESTS. 23
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 24
SHALL DISCLOSE : 25
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 26
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 27
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH. 28
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 29
SHALL DISCLOSE : 30 HOUSE BILL 1211 15
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 1
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 2
2. THE AMOUNT OF THE AVE RAGE PROJECTED 3
PAYMENTS PER MONTH . 4
(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 5
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 6
(I) EXPRESSED AS A NOMINA L YEARLY RATE , INCLUSIVE OF 7
ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECI PIENT; 8
(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 9
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 10
(III) BASED ON THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE 11
TO THE RECIPIENT AND THE TERM RESULTING F ROM MAKING THE MINIM UM 12
REQUIRED PAYMENTS AS DISCLOSED, REGARDLESS OF WHETHE R THE ACT OR 13
REGULATION WOULD REQ UIRE THE CALCULATION . 14
(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE OPEN–END 15
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 16
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUIRED TO 17
PAY: 18
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 19
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 20
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 21
CHARGE. 22
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 23
FINANCE CHARGES OTHER THAN T HE INTEREST ACCRUED SINCE THE RECIPIENT ’S 24
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 25
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 26
RECIPIENT COULD BE R EQUIRED TO PAY . 27
12–1109. 28
(A) (1) IN THIS SECTION THE FOLLOWIN G WORDS HAVE THE MEA NINGS 29
INDICATED. 30
16 HOUSE BILL 1211
(2) “FINANCE CHARGE ” INCLUDES A DISCOUNT TAKEN ON THE FACE 1
VALUE OF THE ACCOUNT S RECEIVABLE. 2
(3) “TOTAL PAYMENT AMOUNT ” MEANS THE PURCHASE A MOUNT OF 3
THE FACTORING TRANSA CTION PLUS THE FINAN CE CHARGE. 4
(B) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO A 5
RECIPIENT WHEN EXTEN DING A SPECIFIC OFFE R FOR A FACTORING TR ANSACTION: 6
(1) THE AMOUNT OF THE REC EIVABLES PURCHASE PR ICE PAID TO 7
THE RECIPIENT AND , IF DIFFERENT FROM TH E PURCHASE PRICE , THE 8
DISBURSEMENT AMOUNT AFTER ANY FEES DEDUC TED OR WITHHELD AT 9
DISBURSEMENT ; 10
(2) THE TOTAL PAYMENT AMO UNT; 11
(3) THE FINANCE CHARGE ; 12
(4) THE ANNUAL PERCENTAGE RATE OF THE FACTORIN G 13
TRANSACTION , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 14
ABBREVIATION “APR”, CALCULATED ACCORDING TO THE FEDERAL TRUTH IN 15
LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE 16
ADVANCE, SINGLE PAYMENT TRANS ACTION”; 17
(5) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND CHARGES 18
THAT CAN BE AVOIDED BY THE RECIPIENT; AND 19
(6) A DESCRIPTION OF THE R ECEIVABLES PURCHASED AND, IF 20
APPLICABLE, ANY ADDITIONAL COLLA TERAL REQUIREMENTS O R SECURITY 21
INTERESTS. 22
(C) (1) FOR PURPOSES OF THIS SUBSECTION, ANNUAL PERCENTAGE 23
RATE SHALL BE CALCUL ATED ACCORDING TO TH E FEDERAL TRUTH IN LENDING 24
ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE ADVANCE , 25
SINGLE PAYMENT TRANS ACTION”, REGARDLESS OF WHETHE R FEDERAL LAW OR 26
REGULATION WOULD REQ UIRE AN ANNUAL PERCE NTAGE RATE TO BE CAL CULATED 27
FOR A CERTAIN TRANSA CTION. 28
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 29
PROVIDER SHALL USE T HE FOLLOWING INFORMA TION TO CALCULATE TH E 30
ESTIMATED ANNUAL PER CENTAGE RATE IN ACCO RDANCE WITH THIS SEC TION: 31
1. THE PURCHASE AMOUNT I S THE FINANCING AMOU NT; 32 HOUSE BILL 1211 17
2. THE PAYMENT AMOUNT IS THE PURCHASE AMOUNT 1
MINUS THE FINANCE CH ARGE; AND 2
3. THE TERM OF THE FACTO RING TRANSACTION IS 3
DETERMINED BY THE PA YMENT DUE DATE OF TH E RECEIVABLES . 4
(II) A PROVIDER MAY ESTIMAT E THE TERM FOR A FAC TORING 5
TRANSACTION AS THE AVERAGE PAYMENT PERI OD, USING HISTORICAL DAT A OVER 6
A PERIOD NOT TO EXCE ED THE PREVIOUS 12 MONTHS, CONCERNING PAYMENT 7
INVOICES PAID BY THE PARTY OWING THE ACCO UNTS RECEIVABLE IN Q UESTION. 8
12–1110. 9
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 10
DISBURSEMENT AMOUNT O F A COMMERCIAL FINAN CING TRANSACTION PLU S THE 11
FINANCE CHARGE . 12
(B) A PROVIDER MAY EXTEND A SPECIAL OFFER OF C OMMERCIAL 13
FINANCING THAT IS NO T AN OPEN–END FINANCING , CLOSED–END FINANCING , 14
SALES–BASED FINANCING , OR A FACTORING TRANS ACTION BUT OTHERWISE MEETS 15
THE DEFINITION OF CO MMERCIAL FINANCING U NDER THIS SUBTITLE . 16
(C) (1) IF A PROVIDER EXTENDS A SPECIAL OFFER THAT IS NOT AN 17
OPEN–END FINANCING , CLOSED–END FINANCING , SALES–BASED FINANCING , OR A 18
FACTORING TRANSACTIO N BUT OTHERWISE MEET S THE DEFINITION OF 19
COMMERCIAL FINANCING UNDER THIS SUBTITLE , THE PROVIDER SHALL D ISCLOSE: 20
(I) THE TOTAL AMOUNT OF T HE COMMERCIAL FINANC ING 21
INCLUDING THE DISBUR SEMENT AMOUNT , IF DIFFERENT FROM TH E FINANCING 22
AMOUNT, MINUS ANY FEES DEDUC TED OR WITHHELD AT DISBURSEMENT ; 23
(II) THE TOTAL REPAYMENT A MOUNT; 24
(III) THE FINANCE CHARGE ; 25
(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 26
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 27
ABBREVIATION “APR”, EXPRESSED AS A YEARL Y RATE, INCLUSIVE OF ANY FEES 28
AND FINANCE CHARGES , AND CALCULATED IN AC CORDANCE WITH THE RE LEVANT 29
SECTIONS OF THE FEDE RAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. § 30
1026.22 OR THIS ARTICLE, REGARDLESS OF WHETHE R THE ACT, THE REGULATION , 31
OR THIS ARTICLE WOUL D REQUIRE THE C ALCULATION; 32 18 HOUSE BILL 1211
(V) THE TERM OF THE COMME RCIAL FINANCING ; 1
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 2
PAYMENT FREQUENCY AN D AMOUNTS; 3
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 4
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING LATE PAYMENT 5
FEES AND RETURNED PA YMENT FEES; AND 6
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 7
REQUIREMENTS OR SECU RITY INTERESTS. 8
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 9
SHALL DISCLOSE : 10
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 11
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 12
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 13
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 14
SHALL DISCLOSE : 15
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 16
METHOD USED TO CALCULATE THE AMO UNTS AND FREQUENCY O F PAYMENTS; AND 17
2. THE AMOUNT OF THE AVE RAGE PROJECTED 18
PAYMENTS PER MONTH . 19
(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE COMMERCIAL 20
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 21
PROVIDER S HALL DISCLOSE WHETHE R THE RECIPIENT WOUL D BE REQUIRED TO 22
PAY: 23
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 24
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 25
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 26
CHARGE. 27
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 28
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 29 HOUSE BILL 1211 19
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 1
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 2
RECIPIENT COULD BE REQUIRE D TO PAY. 3
12–1111. 4
(A) A PROVIDER MAY REQUIRE A RECIPIENT TO PAY O FF THE BALANCE OF 5
AN EXISTING COMMERCI AL FINANCING TRANSAC TION FROM THE SAME P ROVIDER 6
AS A CONDITION OF OB TAINING A NEW OR REN EWAL COMMERCIAL FINA NCING 7
TRANSACTION . 8
(B) IF A PROVIDER REQUIRE S A RECIPIENT TO PAY OFF A COMMERCIAL 9
FINANCING TRANSACTIO N BEFORE OBTAINING A NEW OR RENEWAL COMME RCIAL 10
FINANCING TRANSACTIO N, THE PROVIDER SHALL D ISCLOSE: 11
(1) THE AMOUNT OF THE NEW OR RENEWAL COMMERCIA L FINANCING 12
THAT WILL BE USED TO PAY OFF THE PORTION OF THE EXIST ING COMMERCIAL 13
FINANCING THAT CONSI STS OF ANY REQUIRED PREPAYMENT CHARGES ; AND 14
(2) ANY UNPAID INTEREST T HAT WAS NOT FORGIVEN AT THE TIME 15
THE NEW OR RENEWAL C OMMERCIAL FINANCING WAS ENTERED INTO . 16
(C) (1) FOR FINANCING FOR WHICH THE TOTAL REPAYMENT AMOU NT IS 17
CALCULATED AS A FIXE D AMOUNT, THE PREPAYMENT CHARG E IS EQUAL TO THE 18
ORIGINAL FINANCE CHA RGE MULTIPLIED BY TH E AMOUNT OF THE NEW OR 19
RENEWAL COMMERCIAL F INANCING USED TO PAY OFF THE EXISTING COM MERCIAL 20
FINANCING TRANSACTION AS A PER CENTAGE OF THE TOTAL REPAYMENT AMOUNT , 21
MINUS ANY PORTION OF THE TOTAL REPAYMENT AMOUNT FORGIVEN BY T HE 22
PROVIDER AT THE TIME OF PREPAYMENT . 23
(2) IF THE PREPAYMENT CHA RGE IS MORE THAN ZER O, THE 24
PROVIDER SHALL RECOR D THE AMOUNT AS THE ANSWER TO THE FOLLOWIN G 25
QUESTION: 26
“DOES THE NEW OR RENEW AL COMMERCIAL FINANC ING TRANSACTION INCL UDE 27
ANY AMOUNT THAT IS U SED TO PAY UNPAID FI NANCE CHARGE OR FEES , ALSO 28
KNOWN AS DOUBLE DIPP ING? YES, [ENTER AMOUNT ]”. 29
(D) IF THE DISBURSEMENT A MOUNT OF THE NEW OR RENEWAL 30
COMMERCIAL FINANCING TRANSACTION WILL BE REDUCED TO PAY DOWN ANY 31
UNPAID PORTION OF TH E OUTSTANDING BALANC E OF THE EXISTING CO MMERCIAL 32
FINANCING, THE PROVIDER SHALL D ISCLOSE THE ACTUAL D OLLAR AMOUNT BY 33
WHICH THE DISBURSEME NT AMOUNT WILL BE RE DUCED. 34 20 HOUSE BILL 1211
12–1112. 1
A RECIPIENT SHALL SIGN , MANUALLY OR ELECTRON ICALLY, EACH 2
APPLICABLE DISCLOSUR E REQUIRED UNDER THI S SUBTITLE BEFORE A PROVIDER 3
MAY ALLOW THE RECIPI ENT TO PROCEED WITH THE COMMERCIAL FINAN CING 4
APPLICATION. 5
12–1113. 6
(A) (1) NOTHING IN THIS SUBTITLE MAY BE CONS TRUED TO PREVENT A 7
PROVIDER FROM DISCLO SING ADDITIONAL INFO RMATION TO A RECIPIE NT 8
REGARDING A COMMERCI AL FINANCING TRANSAC TION. 9
(2) IF A PROVIDER PROVIDE S ADDITIONAL DISCLOS URES TO A 10
RECIPIENT OTHER THAN WHAT IS REQUIRED BY THIS SUBTITLE, THE ADDITIONAL 11
DISCLOSURE IS NOT CO NSIDERED A REQUIRED DISCLOSURE UNDER THI S SUBTITLE. 12
(B) (1) IF ADDITIONAL METRICS OF FINANCING COSTS A RE DISCLOSED 13
OR USED IN THE APPLI CATION PROCESS FOR C OMMERCIAL FINANCING , THE 14
ADDITIONAL METRICS M AY NOT BE PRE SENTED AS A RATE IF THEY ARE NOT THE 15
ANNUAL INTEREST RATE OR THE ANNUAL PERCEN TAGE RATE. 16
(2) THE TERM “INTEREST”, WHEN USED TO DESCRIB E A PERCENTAGE 17
RATE, MAY BE USED ONLY TO DESCRIBE ANNUALIZED PERCENTAGE RATES , 18
INCLUDING THE ANNUAL INTEREST RATE . 19
(C) IF A PROVIDER STATES A RATE OF FINANCE CH ARGE OR A FINANCING 20
AMOUNT TO A RECIPIEN T DURING THE APPLICA TION PROCESS FOR COM MERCIAL 21
FINANCING, THE PROVIDER SHALL A LSO STATE THE RATE A S AN “ANNUAL 22
PERCENTAGE RATE ”, USING THAT TERM OR T HE ABBREVIATION “APR”. 23
12–1114. 24
TO CARRY OUT THIS SUB TITLE, THE COMMISSIONER SHALL AD OPT 25
REGULATIONS SUBSTANT IALLY THE SAME AS RE GULATIONS ADOPTED BY THE NEW 26
YORK STATE DEPARTMENT OF FINANCIAL SERVICES REGARDING CO MMERCIAL 27
FINANCING. 28
12–1115. 29
(A) A VIOLATION OF THIS SU BTITLE IS AN UNFAIR, ABUSIVE, OR DECEPTIVE 30
TRADE PRACTICE WITHI N THE MEANING OF TITLE 13 OF THE COMMERCIAL LAW 31 HOUSE BILL 1211 21
ARTICLE AND IS SUBJEC T TO THE ENFORCEMENT AND PENALTY PROVISIO NS 1
CONTAINED IN TITLE 13 OF THE COMMERCIAL LAW ARTICLE. 2
(B) (1) THE COMMISSIONER SH ALL IMPOSE A CIVIL P ENALTY, NOT 3
EXCEEDING: 4
(I) $ 2,000, FOR EACH VIOLATION O F THIS SUBTITLE; AND 5
(II) $10,000, FOR EACH WILLFUL VIO LATION OF THIS SUBTI TLE. 6
(2) THE COMMISSIONER MAY ORDE R ADDITIONAL RELIEF , 7
INCLUDING RESTITUTIO N OR A PERMANENT OR PRELIMINARY INJUNCTI ON ON 8
BEHALF OF A RECIPIEN T AFFECTED BY A VIOL ATION OF THIS SUBTIT LE. 9
(C) IF A COMPLAINT ABOUT A VIOLATION OF THIS SUBTITLE IS FILED WI TH 10
THE COMMISSIONER , THE COMMISSIONER MAY INVE STIGATE THE COMPLAIN T AND 11
USE ANY OF THE INVESTIGATIVE AND EN FORCEMENT POWERS PRO VIDED UNDER 12
TITLE 2, SUBTITLE 1 OF THIS ARTICLE. 13
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
October 1, 2022. 15