EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0825*
SENATE BILL 825
I1, I2 2lr1138
CF HB 1211
By: Senator Kramer
Introduced and read first time: February 7, 2022
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 5, 2022
CHAPTER ______
AN ACT concerning 1
Consumer Credit – Commercial Financing Transactions – Requirements 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 2 SENATE BILL 825
Article – Financial Institutions 1
Section 11–610(a)(13)(i), (b)(1), and (c) 2
Annotated Code of Maryland 3
(2020 Replacement Volume and 2021 Supplement) 4
BY adding to 5
Article – Financial Institutions 6
Section 12–1101 through 12–1115 12–1114 to be under the new subtitle “Subtitle 11. 7
Commercial Financing” 8
Annotated Code of Maryland 9
(2020 Replacement Volume and 2021 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – Commercial Law 13
13–301. 14
Unfair, abusive, or deceptive trade practices include any: 15
(14) Violation of a provision of: 16
(xxxiv) The federal Servicemembers Civil Relief Act; [or] 17
(xxxv) [§] SECTION 11–210 of the Education Article; or 18
(XXXVI) TITLE 12, SUBTITLE 11 OF THE FINANCIAL 19
INSTITUTIONS ARTICLE; OR 20
Article – Financial Institutions 21
11–610. 22
(a) There is a Nondepository Special Fund that consists of: 23
(13) (i) Any other fee, examination or investigation fee or assessment, or 24
revenue received by the Commissioner under this subtitle, Subtitles 2, 3, 4, and 5 of this 25
title, Title 12, Subtitles 1, 4, 9, and 10 of this article, Title 12, [Subtitle] SUBTITLES 12 26
AND 14 of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial 27
Law Article; and 28
(b) Notwithstanding subsection (a) of this section: 29
(1) The Commissioner shall pay all fines and penalties collected by the 30
Commissioner under Title 2, Subtitle 1 of this article, this subtitle, Subtitles 2, 3, 4, and 5 31 SENATE BILL 825 3
of this title, Title 12, Subtitles 1, 4, 9, [and] 10, AND 11 of this article, Title 12, Subtitle 14 1
of the Commercial Law Article, and Title 14, Subtitles 12 and 19 of the Commercial Law 2
Article into the General Fund of the State; and 3
(c) The purpose of the Fund is to cover the direct and indirect costs of fulfilling 4
the statutory and regulatory duties of the Commissioner and the State Collection Agency 5
Licensing Board related to: 6
(1) Title 2, Subtitle 1 of this article; 7
(2) This subtitle; 8
(3) Subtitle 2 of this title; 9
(4) Subtitle 3 of this title; 10
(5) Subtitle 4 of this title; 11
(6) Subtitle 5 of this title; 12
(7) Title 12, Subtitle 1 of this article; 13
(8) Title 12, Subtitle 4 of this article; 14
(9) Title 12, Subtitle 9 of this article; 15
(10) Title 12, Subtitle 10 of this article; 16
(11) TITLE 12, SUBTITLE 11 OF THIS ARTICLE; 17
[(11)] (12) Title 7 of the Business Regulation Article; 18
[(12)] (13) Title 12 of the Commercial Law Article; 19
[(13)] (14) Title 14, Subtitles 12, 19, and 42 of the Commercial Law Article; 20
[(14)] (15) Title 7, Subtitles 1, 3, 4, and 5 of the Real Property Article; 21
[(15)] (16) Title 26, Subtitle 6 of the Education Article; and 22
[(16)] (17) Any other expense authorized in the State budget. 23
SUBTITLE 11. COMMERCIAL FINANCING. 24
12–1101. 25
4 SENATE BILL 825
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2
(B) (1) “CLOSED–END FINANCING ” MEANS A CLOSED –END EXTENSION OF 3
CREDIT, SECURED OR UNSECURED , INCLUDING EQUIPMENT FINANCING, THAT: 4
(I) DOES NOT MEET THE DEF INITION OF A LEASE U NDER 5
ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE; AND 6
(II) THE PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND 7
TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 8
(2) “CLOSED–END FINANCING ” INCLUDES FINANCING T HAT HAS AN 9
ESTABLISHED PRINCIPA L AMOUNT AND DURATIO N. 10
(C) “COMMERCIAL FINANCING ” MEANS OPEN –END FINANCING , 11
CLOSED–END FINANCING , SALES–BASED FINANCING , A FACTORING TRANSACT ION, 12
OR ANOTHER FORM OF FI NANCING, THE PROCEEDS OF WHIC H THE RECIPIENT DOES 13
NOT INTEND TO USE PR IMARILY FOR PERSONAL , FAMILY, OR HOUSEHOLD 14
PURPOSES. 15
(D) “FACTORING TRANSACTION ” MEANS AN ACCOUNTS RE CEIVABLE 16
PURCHASE TRANSACTION : 17
(1) THAT INCLUDES AN AGRE EMENT TO PURCHASE , TRANSFER, OR 18
SELL A LEGALLY ENFOR CEABLE CLAIM FOR PAY MENT HELD BY A RECIP IENT FOR 19
GOODS THE RECIPIENT HAS SUPPLIED OR SERV ICES THE RECIPIENT H AS RENDERED 20
THAT HAVE BEEN ORDER ED BUT FOR WHICH PAY MENT HAS NOT BEEN MA DE; AND 21
(2) THE PROCEED S OF WHICH THE RECIP IENT DOES NOT INTEND TO 22
USE PRIMARILY FOR PE RSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 23
(E) (1) “FINANCE CHARGE ” MEANS THE COST OF CO MMERCIAL 24
FINANCING REPRESENTE D AS A DOLLAR AMOUNT . 25
(2) “FINANCE CHARGE ” INCLUDES: 26
(I) A CHARGE PAYABLE DIRECTLY OR INDIRECTLY BY A 27
RECIPIENT AND IMPOSE D DIRECTLY OR INDIRE CTLY BY A PROVIDER A S AN 28
INCIDENT TO OR A CON DITION OF THE EXTENS ION OF COMMERCIAL FI NANCING; 29
(II) A CHARGE THAT WOULD BE INCLUDED UNDER 12 C.F.R. 30
PART 1026.4 IF A TRANSACTION WERE SUBJECT TO 12 C.F.R. PART 1026.4; AND 31
SENATE BILL 825 5
(III) ANY ADDITIONAL CHARGE S DETERMINED BY THE 1
COMMISSIONER . 2
(F) (1) “OPEN–END FINANCING ” MEANS AN AGREEMENT F OR ONE OR 3
MORE EXTENSIONS OF S ECURED OR UNSECURED OPEN–END CREDIT , THE 4
PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND TO USE PRIMARILY FOR 5
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 6
(2) “OPEN–END FINANCING ” INCLUDES CREDIT EXTE NDED BY A 7
PROVIDER UNDER A PLA N IN WHICH: 8
(I) THE PROVIDER REASONAB LY CONTEMPLATES REPE ATED 9
TRANSACTIONS ; 10
(II) THE PROVIDER MAY IMPOSE A FINANCE CHARGE ON AN 11
OUTSTANDING UNPAID B ALANCE; AND 12
(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO A 13
RECIPIENT DURING THE TERM OF THE PLAN , UP TO A LIMIT THAT T HE PROVIDER 14
SETS, IS GENERALLY MADE AV AILABLE TO THE EXTEN T THAT ANY OUTSTANDING 15
BALANCE IS REPAID . 16
(G) (1) “PROVIDER” MEANS A PERSON THAT EXTENDS A SPECIFIC O FFER 17
OF COMMERCIAL FINANC ING TO A RECIPIENT . 18
(2) “PROVIDER” INCLUDES A PERSON TH AT SOLICITS AND PRES ENTS 19
A SPECIFIC OFFER OF COMMERCIAL FINANCING ON BEHALF OF A THIRD PARTY. 20
(H) (1) “RECIPIENT” MEANS A PERSON , OR THE PERSON ’S AUTHORIZED 21
REPRESENTATIVE , THAT APPLIES FOR COM MERCIAL FINANCING AN D IS MADE A 22
SPECIFIC OFFER OF CO MMERCIAL FINANCING B Y A PROVIDER. 23
(2) “RECIPIENT” DOES NOT INCLUDE A P ERSON ACTING AS A 24
BROKER. 25
(I) (1) “SALES–BASED FINANCING ” MEANS A TRANSACTION : 26
(I) THAT IS REPAID BY A RECIPIENT TO A PROVID ER OVER TIME 27
AS A PERCENTAGE OF S ALES OR REVENUE , IN WHICH THE PAYMENT AMOUNT MAY 28
INCREASE OR DECREASE ACCORDING TO THE VOL UME OF SALES MADE OR REVENUE 29
RECEIVED BY THE RECI PIENT; AND 30
(II) THE PROCEEDS OF WHICH THE RECIPIENT DOES N OT 31
INTEND TO USE PRIMAR ILY FOR PERSONAL , FAMILY, OR HOUSEHOLD PURPOSE S. 32 6 SENATE BILL 825
(2) “SALES–BASED FINANCING ” INCLUDES A TRANSACTI ON 1
CONTAINING A TRUE –UP MECHANISM UNDER WHICH THE FINANCING IS REPAID AS 2
A FIXED PAYMENT BUT PROVIDES FOR A RECON CILIATION PROCESS TH AT ADJUSTS 3
THE PAYMENT TO AN AM OUNT THAT IS A PERCE NTAGE OF SALES OR RE VENUE. 4
(J) “SPECIFIC OFFER ” MEANS THE TERMS OF C OMMERCIAL FINANCING 5
THAT ARE QUOTED TO A RECIPIENT, BASED ON INFORMATION OBTAINED FROM OR 6
ABOUT THE RECIPIENT , WHICH IF ACCEPTED BY THE RECIPIENT ARE BI NDING ON A 7
PROVIDER, AS APPLICABLE, SUBJECT TO REQUIREME NTS STATED IN THE TE RMS OF 8
THE COMMERCIAL FINAN CING. 9
12–1102. 10
THIS SUBTITLE DOES NO T APPLY TO: 11
(1) (I) A FINANCIAL INSTITUTIO N A FEDERAL OR STATE BANK, 12
CREDIT UNION, OR SAVINGS ASSOCIATI ON; OR 13
(II) A SUBSIDIARY OR AFFILI ATE OF AN ORGANIZATI ON LISTED 14
IN ITEM (I) OF THIS ITEM; 15
(2) A PERSON ACTING AS A T ECHNOLOGY SERVICES P ROVIDER TO AN 16
ENTITY EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE ENTIT Y’S 17
COMMERCIAL FINANCING PROGRAM IF THE PERSO N DOES NOT HAVE AN I NTEREST, 18
ARRANGEMENT , OR AGREEMENT TO PURC HASE ANY INTEREST IN THE COMMERCIAL 19
FINANCING EXTENDED B Y THE ENTITY IN CONN ECTION WITH THE COMMERCIAL 20
FINANCING PROGRAM ; 21
(3) A LENDER REGULATED UND ER THE FEDERAL FARM CREDIT ACT; 22
(4) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL 23
PROPERTY; 24
(5) A LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM 25
COMMERCIAL CODE; 26
(6) A PROVIDER OR OTHER PERSON WHO MAKES NO MORE THAN F IVE 27
COMMERCIAL FINANCING TRANSACTIONS IN THE STATE IN A 12–MONTH PERIOD ; 28
(7) A COMMERCIAL FINANCING TRANSACTION OVER $2,500,000; OR 29
(8) A COMMERCIAL FINANCING TRANSACTION : 30
SENATE BILL 825 7
(I) IN WHICH THE RECIPIEN T IS: 1
1. A DEALER, OR AN AFFILIATE OF A DEALER, AS 2
DEFINED IN § 11–111 OF THE TRANSPORTATION ARTICLE; OR 3
2. A RENTAL VEHICLE COMPA NY, OR AN AFFILIATE OF A 4
RENTAL VEHICLE COMPA NY, AS DEFINED IN § 18–108 OF THE TRANSPORTATION 5
ARTICLE; AND 6
(II) MADE UNDER A COMMERCIAL FINAN CING AGREEMENT OR 7
COMMERCIAL OPEN –END CREDIT PLAN OF A T LEAST $50,000, INCLUDING A 8
COMMERCIAL LOAN MADE IN ACCORDANCE WITH T HE COMMERCIAL FINANC ING 9
TRANSACTION ; OR 10
(9) A COMMERCIAL FINANCING TRANSACTION THAT IS A FACTORING 11
TRANSACTION , AN ADVANCE , OR A SIMILAR TRANSAC TION OF ACCOUNTS 12
RECEIVABLES OWED TO A HEALTH CARE PROVID ER BECAUSE OF A PATI ENT’S 13
PERSONAL INJURY TREA TED BY THE HEALTH CA RE PROVIDER. 14
12–1103. 15
(A) (1) FOR PURPOSES OF DETER MINING WHETHER A FIN ANCING 16
TRANSACTION IS A COMMERCIAL FINANCING TRANSACTIO N, A PROVIDER MAY RELY 17
ON A STATEMENT OF IN TENDED PURPOSE MADE BY A RECIPIENT. 18
(2) A RECIPIENT’S STATEMENT OF INTEN DED PURPOSE MAY BE : 19
(I) CONTAINED IN THE COMM ERCIAL FINANCING 20
APPLICATION, COMMERCIAL FINANCING AGREEMENT , OR OTHER DOCUMENT 21
SIGNED OR CONSENTED TO BY THE RECIPIENT ; 22
(II) A SEPARATE STATEMENT S IGNED, MANUALLY OR 23
ELECTRONICALLY , BY THE RECIPIENT ; OR 24
(III) IF DOCUMENTED IN THE RECIPIENT’S APPLICATION FILE , 25
PROVIDED ORALLY BY T HE RECIPIENT. 26
(B) A PROVIDER MAY NOT BE REQUIRED TO VERIFY T HAT THE PROCEEDS 27
OF A COMMERCIAL FINA NCING TRANSACTION AR E BEING USED IN ACCO RDANCE 28
WITH A RECIPIENT ’S STATEMENT OF INTEN DED PURPOSE . 29
(C) THE EXTENSION OF A SP ECIFIC OFFER OR PROV ISION OF DISCLOSURES 30
FOR COMMERCIAL FINAN CING BY A PROVIDER , IN AND OF ITSELF , MAY NOT BE 31 8 SENATE BILL 825
CONSTRUED TO MEAN TH AT THE PROVIDER IS O RIGINATING, MAKING, FUNDING, OR 1
PROVIDING COMMERCIAL FINANCING. 2
12–1104. 3
(A) EXCEPT AS PROVIDED IN § 12–1108 § 12–1107 OF THIS SUBTITLE , FOR 4
PURPOSES OF THIS SUB TITLE, AN ANNUAL PERCENTAGE RATE SHALL BE: 5
(1) EXPRESSED AS A YEARLY RATE, INCLUDING ALL FEES A ND 6
FINANCE CHARGES ; AND 7
(2) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH IN 8
LENDING ACT. 9
(B) IN ADDITION TO THE RE QUIREMENTS OF SU BSECTION (A)(2) OF THIS 10
SECTION, AN ANNUAL PERCENTAGE RATE SHALL BE CALCUL ATED BASED ON THE 11
ESTIMATED TERM OF RE PAYMENT AND THE PROJ ECTED PERIODIC PAYME NT 12
AMOUNTS OF A COMMERC IAL FINANCING TRANSA CTION, REGARDLESS OF WHETHE R 13
FEDERAL LAW OR REGUL ATION WOULD REQUIRE AN ANNUAL PE RCENTAGE RATE TO 14
BE CALCULATED FOR A CERTAIN TRANSACTION . 15
12–1105. 12–1104. 16
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 17
INDICATED. 18
(2) “ESTIMATED TERM OF REP AYMENT” MEANS THE AMOUNT OF 19
TIME REQUIRED FOR TH E PERIODIC PAYMENTS MADE BY A RECIPIENT IN A 20
SALES–BASED FINANCING TRAN SACTION TO EQUAL THE TOTAL AMOUNT REQUIRE D 21
TO BE REPAID. 22
(3) “TOTAL REPAYMENT AMOUN T” MEANS THE DISBURSEME NT 23
AMOUNT OF A SALES –BASED FINANCING TRAN SACTION PLUS THE FIN ANCE CHARGE . 24
(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 25
A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER OF SALES–BASED FINANCING : 26
(I) THE TOTAL AMOUNT OF T HE SALES–BASED FINANCING AND 27
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 28
MINUS ANY FEES DEDUCTED OR WITHHELD AT DISBURSE MENT; 29
(II) THE FINANCE CHARGE ; 30
SENATE BILL 825 9
(III) THE ESTIMATED ANNUAL PERCENTAGE RATE OF T HE 1
SALES–BASED FINANCING , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 2
ABBREVIATION “APR”; 3
(IV) THE TOTAL REPAYMENT AMOUNT; 4
(V) THE ESTIMATED TERM OF REPAYMENT ; 5
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 6
PROJECTED PERIODIC P AYMENT AMOUNTS ; 7
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 8
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES, LATE 9
PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 10
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 11
REQUIREMENTS OR SECU RITY INTERESTS. 12
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 13
SHALL DISCLOSE : 14
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 15
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 16
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 17
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 18
SHALL DISCLOSE : 19
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 20
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 21
2. THE AMOUNT OF THE AVE RAGE PROJECTED 22
PAYMENTS PER MONTH . 23
(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE SALES–BASED 24
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 25
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 26
PAY: 27
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 28
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 29
10 SENATE BILL 825
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 1
CHARGE. 2
(2) IF A RECIPIENT WOULD BE R EQUIRED TO PAY ADDIT IONAL 3
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 4
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 5
PORTION OF THE FINAN CE CHARGE AND THE MA XIMUM DOLLAR AMOUNT THE 6
RECIPIENT COULD BE REQUIRED TO PAY. 7
12–1106. 12–1105. 8
(A) (1) A PROVIDER SHALL USE T HE PROJECTED SALES V OLUME OF A 9
RECIPIENT TO CALCULA TE THE FOLLOWING INF ORMATION RELATED TO A 10
SALES–BASED FINANCING TRAN SACTION: 11
(I) THE ESTIMATED TERM OF REPAYMENT AND THE 12
PROJECTED PAYMENT AM OUNTS OF A SALES–BASED FINANCING TRAN SACTION; AND 13
(II) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A 14
SALES–BASED FINANCING TRAN SACTION. 15
(2) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A SALES–BASED 16
FINANCING TRANSACTIO N SHALL BE CALCUL ATED: 17
(I) IN ACCORDANCE WITH TH E FEDERAL TRUTH IN LENDING 18
ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 19
(II) BASED ON THE ESTIMATE D TERM OF REPAYMENT AND 20
PROJECTED SALES VOLU ME OF A RECIPIENT . 21
(B) (1) A PROVIDER MAY CALCULA TE THE PROJECTED SAL ES VOLUME OF 22
A RECIPIENT USING EI THER THE HISTORICAL METHOD OR THE OPT –IN METHOD. 23
(2) (I) A PROVIDER THAT USES T HE HISTORICAL METHOD TO 24
CALCULATE THE PROJEC TED SALES VOLUME OF A RECIPIENT SHALL US E AN 25
AVERAGE HISTORICAL V OLUME OF SALES OR RE VENUE. 26
(II) A PROVIDER SHALL FIX T HE HISTORICAL TIME P ERIOD 27
USED TO CALCULATE TH E AVERAGE HISTORICAL VOLUME AND USE THE S AME TIME 28
PERIOD FOR ALL DISCL OSURE PURPOSES FOR A NY SALES–BASED FINANCING 29
TRANSACTION PRODUCTS OFFERED. 30
(III) EXCEPT AS PROVIDED IN SUBPARAGR APH (IV) OF THIS 31
PARAGRAPH , THE FIXED HISTORICAL TIME PERIOD: 32 SENATE BILL 825 11
1. MAY NOT BE LESS THAN 1 MONTH AND MAY NOT 1
EXCEED 12 MONTHS; AND 2
2. SHALL BE THE TIME PER IOD DIRECTLY BEFORE THE 3
SPECIFIC OFFER WAS M ADE. 4
(IV) A PROVIDER MAY CHOOSE TO USE THE AVERAGE SALES FOR 5
THE SAME NUMBER OF M ONTHS AS THE PROVIDE R WOULD HAVE USED UN DER 6
PARAGRAPH (3) OF THIS SUBSECTION W ITH THE HIGHEST SALE S VOLUME WITHIN 7
THE PAST 12 MONTHS. 8
(3) A PROVIDER MAY USE THE OPT–IN METHOD TO DETERMI NE THE 9
INFORMATION LISTED U NDER SUBSECTION (A)(1) OF THIS SECTION BY U SING A 10
PROJECTED SALES VOLU ME THAT THE PROVIDER CHOOSES FOR EACH DIS CLOSURE 11
IF THE RECIPIENT PAR TICIPATES IN A REVIE W PROCESS ESTABLISHE D BY THE 12
COMMISSIONER . 13
(C) A PROVIDER SHALL NOTIF Y THE COMMISSIONER WHICH OF THE TWO 14
METHODS THE PROVIDER INTENDS TO USE WHEN CALCULATING THE ESTI MATED 15
ANNUAL PERCENTAGE OF EACH SALES–BASED FINANCING TRAN SACTION. 16
(D) (1) ON OR BEFORE JANUARY 1 EACH YEAR, A PROVIDER SHALL 17
REPORT TO THE COMMISSIONER ON : 18
(I) THE ESTIMATED ANNUAL PERCENTAGE RATES GIV EN TO 19
EACH RECIPIENT ; AND 20
(II) THE ACTUAL ANNUAL PER CENTAGE RATES OF EAC H 21
COMPLETED SALES –BASED FINANCING TRAN SACTION. 22
(2) (I) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 23
SUBSECTION SHALL CON TAIN ANY INFORMATION THE COMMISSIONER CONSIDERS 24
NECESSARY TO DETERMI NE WHETHER THE DEVIA TION BETWEEN THE EST IMATED 25
ANNUAL PERCENTAGE RA TES AND ACTUAL ANNUA L PERCENTAGE RATES O F 26
COMPLETED SALES –BASED FINANCING TRAN SACTIONS IS REASONAB LE. 27
(II) THE COMMISSIONER MAY CONS IDER EXTRAORDINARY 28
CIRCUMSTANCES WHEN D ETERMINING WHETHER T HE PROVIDER ’S DEVIATION 29
BETWEEN THE ESTIMATE D ANNUAL PERCENTAGE RATE AND ACTUAL ANNU AL 30
PERCENTAGE RATE OF A SALES–BASED FINANCING TRAN SACTION IS REASONABL E. 31
(III) IF THE COMMISSIONER FINDS TH AT THERE WAS AN 32
UNREASONABLE DEVIATION BE TWEEN ESTIMATED AND ACTUAL ANNUAL 33 12 SENATE BILL 825
PERCENTAGE RATES OF SALES–BASED FINANCING TRAN SACTIONS, THE 1
COMMISSIONER MAY REQU IRE THE PROVIDER TO USE THE HISTORICAL M ETHOD 2
INSTEAD OF THE OPT –IN METHOD IN DETERMI NING THE PROJECTED S ALES VOLUME 3
OF THE RECIPIENT. 4
12–1107. 12–1106. 5
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 6
DISBURSEMENT AMOUNT OF A CLOSED–END FINANCING TRANSA CTION PLUS THE 7
FINANCE CHARGE . 8
(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 9
A RECIPIENT WHEN EXTENDING A SPECIFIC OFFER FOR CLOSED –END FINANCING : 10
(I) THE TOTAL AMOUNT OF T HE CLOSED–END FINANCING AND 11
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 12
MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 13
(II) THE TOTAL REPAYMENT AMOUNT; 14
(III) THE FINANCE CHARGE ; 15
(IV) THE ANNUAL PERCENTAGE RATE OF THE CLOSED –END 16
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 17
ABBREVIATION “APR”; 18
(V) THE TERM OF THE FINAN CING; 19
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECT ION, THE 20
PROJECTED PERIODIC P AYMENT AMOUNTS ; 21
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 22
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 23
PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 24
(VIII) IF APPLICABLE , A DESCRIPTION OF COLLATERAL 25
REQUIREMENTS OR SECU RITY INTERESTS. 26
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 27
SHALL DISCLOSE : 28
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 29
SENATE BILL 825 13
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 1
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYMENTS P ER MONTH. 2
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 3
SHALL DISCLOSE : 4
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 5
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 6
2. THE AMOUNT OF THE AVE RAGE PROJECTED 7
PAYMENTS PER MONTH . 8
(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 9
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 10
(I) EXPRESSED AS A YEARLY RATE, INCLUSIVE OF ANY FEE S 11
AND FINANCE CHARGES THAT CANNOT BE AVOID ED BY A RECIPIENT; AND 12
(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 13
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22, REGARDLESS OF 14
WHETHER THE ACT OR REGULATION WOU LD REQUIRE THE CALCU LATION. 15
(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE CLOSED–END 16
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 17
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 18
PAY: 19
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 20
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 21
(II) ANY ADDITIONAL FEES NOT I NCLUDED IN THE FINAN CE 22
CHARGE. 23
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 24
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 25
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 26
PORTION OF THE FINANCE CHARG E AND MAXIMUM DOLLAR AMOUNT THE 27
RECIPIENT COULD BE R EQUIRED TO PAY . 28
12–1108. 12–1107. 29
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE DRAW 30
AMOUNT OF THE OPEN –END FINANCING TRANSA CTION, MINUS ANY FEES DEDUC TED 31
OR WITHHELD AT D ISBURSEMENT , PLUS THE FINANCE CHA RGE. 32 14 SENATE BILL 825
(B) (1) WHEN CALCULATING THE TOTAL REPAYMENT AMOU NT IN 1
ACCORDANCE WITH THIS SECTION, A PROVIDER SHALL ASS UME A DRAW AMOUNT 2
EQUAL TO THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE TO THE RECIPI ENT IF 3
DRAWN AND HELD FOR T HE DURATION OF THE TERM O R DRAW PERIOD . 4
(2) WHEN CALCULATING A FI NANCE CHARGE IN ACCO RDANCE WITH 5
THIS SECTION, A PROVIDER SHALL ASS UME THE MAXIMUM AMOU NT OF CREDIT 6
AVAILABLE TO THE REC IPIENT, IN EACH CASE , IS DRAWN AND HELD FO R THE 7
DURATION OF THE TERM OF THE DRAW PERIOD . 8
(C) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 9
A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR OPEN–END FINANCING : 10
(I) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE 11
RECIPIENT AND THE AM OUNT SCHEDULED TO BE DRAWN BY TH E RECIPIENT AT THE 12
TIME THE OFFER IS EX TENDED, IF ANY, MINUS ANY FEES DEDUC TED OR WITHHELD 13
AT DISBURSEMENT ; 14
(II) THE FINANCE CHARGE ; 15
(III) THE TOTAL REPAYMENT A MOUNT; 16
(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 17
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 18
ABBREVIATION “APR”; 19
(V) THE TERM OF THE PLAN , IF APPLICABLE, OR THE PERIOD 20
OVER WHICH A DRAW IS AMORTIZED; 21
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 22
PAYMENT FREQUENCY AN D AMOUNTS; 23
(VII) A DESCRIPTION OF ANY OTHER POTENTI AL FEES AND 24
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 25
PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 26
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 27
REQUIREMENTS OR SECU RITY INTERESTS. 28
(2) (I) FOR PAYMENT AMOUNTS THAT ARE FIXED, A PROVIDER 29
SHALL DISCLOSE : 30
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 31 SENATE BILL 825 15
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 1
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 2
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE, A PROVIDER 3
SHALL DISCLOSE : 4
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 5
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 6
2. THE AMOUNT OF THE AVE RAGE PROJECTED 7
PAYMENTS PER MONTH . 8
(3) THE ANNUAL PERCENTAGE RATE REQU IRED TO BE DISCLOSED 9
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 10
(I) EXPRESSED AS A NOMINA L YEARLY RATE , INCLUSIVE OF 11
ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECI PIENT; 12
(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 13
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 14
(III) BASED ON THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE 15
TO THE RECIPIENT AND THE TERM RESULTING F ROM MAKING THE MINIM UM 16
REQUIRED PAYMENTS AS DISCLOSED, REGARDLESS OF WHETHE R THE ACT OR 17
REGULATION WOULD REQUIRE THE CA LCULATION. 18
(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE OPEN–END 19
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 20
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 21
PAY: 22
(I) ANY FINANCE CHARGES O THER THAN THE INTERES T 23
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 24
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 25
CHARGE. 26
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 27
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 28
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 29
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 30
RECIPIENT COULD BE R EQUIRED TO PAY . 31
16 SENATE BILL 825
12–1109. 12–1108. 1
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 2
INDICATED. 3
(2) “FINANCE CHARGE ” INCLUDES A DISCOUNT TAKEN ON THE FACE 4
VALUE OF THE ACCOUNT S RECEIVABLE. 5
(3) “TOTAL PAYMENT AMOUNT ” MEANS THE PURCHASE A MOUNT OF 6
THE FACTORING TRANSA CTION PLUS THE FINAN CE CHARGE. 7
(B) A PROVIDER SHALL DISCL OSE THE FOLL OWING INFORMATION TO A 8
RECIPIENT WHEN EXTEN DING A SPECIFIC OFFE R FOR A FACTORING TR ANSACTION: 9
(1) THE AMOUNT OF THE REC EIVABLES PURCHASE PR ICE PAID TO 10
THE RECIPIENT AND , IF DIFFERENT FROM TH E PURCHASE PRICE , THE 11
DISBURSEMENT AMOUNT AFTER ANY FEES DEDUC TED OR WITHHELD AT 12
DISBURSEMENT ; 13
(2) THE TOTAL PAYMENT AMO UNT; 14
(3) THE FINANCE CHARGE ; 15
(4) THE ANNUAL PERCENTAGE RATE OF THE FACTORIN G 16
TRANSACTION , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 17
ABBREVIATION “APR”, CALCULATED ACCORDING TO THE FEDERAL TRUTH IN 18
LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE 19
ADVANCE, SINGLE PAYMENT TRANS ACTION”; 20
(5) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND CHARGES 21
THAT CAN BE AVOIDED BY THE RECIPIENT ; AND 22
(6) A DESCRIPTION OF THE RECEIVABLES PURC HASED AND , IF 23
APPLICABLE, ANY ADDITIONAL COLLA TERAL REQUIREMENTS O R SECURITY 24
INTERESTS. 25
(C) (1) FOR PURPOSES OF THIS SUBSECTION, ANNUAL PERCENTAGE 26
RATE SHALL BE CALCUL ATED ACCORDING TO TH E FEDERAL TRUTH IN LENDING 27
ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE ADVANCE , 28
SINGLE PAYMENT TRANS ACTION”, REGARDLESS OF WHETHE R FEDERAL LAW OR 29
REGULATION WOULD REQ UIRE AN ANNUAL PERCE NTAGE RATE TO BE CAL CULATED 30
FOR A CERTAIN TRANSA CTION. 31
SENATE BILL 825 17
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 1
PROVIDER SHALL USE T HE FOLLOWING INFORMA TION TO CALCULATE TH E 2
ESTIMATED ANNUAL PER CENTAGE RATE IN ACCO RDANCE WITH THIS SEC TION: 3
1. THE PURCHASE AMOUNT I S THE FINANCING AMOU NT; 4
2. THE PAYMENT AMOUNT IS THE PURCHASE AMOUNT 5
MINUS THE FINANCE CHARGE ; AND 6
3. THE TERM OF THE FACTO RING TRANSACTION IS 7
DETERMINED BY THE PA YMENT DUE DATE OF TH E RECEIVABLES . 8
(II) A PROVIDER MAY ESTIMAT E THE TERM FOR A FAC TORING 9
TRANSACTION AS THE A VERAGE PAYMENT PERIO D, USING HISTORICAL DAT A OVER 10
A PERIOD NOT TO EXCE ED THE PREVIOUS 12 MONTHS, CONCERNING PAYMENT 11
INVOICES PAID BY THE PARTY OWING THE ACCO UNTS RECEIVABLE IN Q UESTION. 12
12–1110. 12–1109. 13
(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 14
DISBURSEMENT AMOUNT OF A COMMERCIAL FINA NCING TRANSACTION PLUS THE 15
FINANCE CHARGE . 16
(B) A PROVIDER MAY EXTEND A SPECIAL OFFER OF C OMMERCIAL 17
FINANCING THAT IS NO T AN OPEN–END FINANCING , CLOSED–END FINANCING , 18
SALES–BASED FINANCING , OR A FACTORING TRANS ACTION BUT OTHERWISE MEETS 19
THE DEFINITION OF CO MMERCIAL FINANCING U NDER THIS SUBTITLE . 20
(C) (1) IF A PROVIDER EXTENDS A SPECIAL OFFER THAT IS NOT AN 21
OPEN–END FINANCING , CLOSED–END FINANCING , SALES–BASED FINANCING , OR A 22
FACTORING TRANSACTIO N BUT OTHERWISE MEET S THE DEFINITION OF 23
COMMERCIAL FINANCING UNDER THIS SUBTITLE , THE PROVIDER SHALL D ISCLOSE: 24
(I) THE TOTAL AMOUNT OF T HE COMMERCIAL FINANC ING 25
INCLUDING THE DISBUR SEMENT AMOUNT , IF DIFFERENT FROM TH E FINANCING 26
AMOUNT, MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 27
(II) THE TOTAL REPAYM ENT AMOUNT ; 28
(III) THE FINANCE CHARGE ; 29
(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 30
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 31
ABBREVIATION “APR”, EXPRESSED AS A YEARL Y RATE, INCLUSIVE OF ANY FEE S 32 18 SENATE BILL 825
AND FINANCE CHARGES , AND CALCULATED IN ACCORD ANCE WITH THE RELEVA NT 1
SECTIONS OF THE FEDE RAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. § 2
1026.22 OR THIS ARTICLE, REGARDLESS OF WHETHE R THE ACT, THE REGULATION , 3
OR THIS ARTICLE WOUL D REQUIRE THE CALCUL ATION; 4
(V) THE TERM OF TH E COMMERCIAL FINANCI NG; 5
(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 6
PAYMENT FREQUENCY AN D AMOUNTS; 7
(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 8
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING LATE PAYME NT 9
FEES AND RETURNED PA YMENT FEES; AND 10
(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 11
REQUIREMENTS OR SECU RITY INTERESTS. 12
(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 13
SHALL DISCLOSE : 14
1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 15
2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 16
MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 17
(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 18
SHALL DISCLOSE : 19
1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 20
METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENTS ; AND 21
2. THE AMOUNT OF THE AVE RAGE PROJECTED 22
PAYMENTS PER MONTH . 23
(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE COMMERCIAL 24
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 25
PROVIDER SHALL DISCL OSE WHETHER THE RECIPIENT WOULD BE R EQUIRED TO 26
PAY: 27
(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 28
ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 29
(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 30
CHARGE. 31 SENATE BILL 825 19
(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 1
FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 2
LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 3
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 4
RECIPIENT COULD BE R EQUIRED TO PAY . 5
12–1111. 12–1110. 6
(A) A PROVIDER MAY REQUIRE A RECIPIENT TO PAY O FF THE BALANCE OF 7
AN EXISTING COMMERCI AL FINANCING TRANSAC TION FROM THE SAME P ROVIDER 8
AS A CONDITION OF OB TAINING A NEW OR REN EWAL COMMERCIAL FINA NCING 9
TRANSACTION . 10
(B) IF A PROVIDER REQUIRE S A RECIPIENT TO PAY OFF A COMMERC IAL 11
FINANCING TRANSACTIO N BEFORE OBTAINING A NEW OR RENEWAL COMME RCIAL 12
FINANCING TRANSACTIO N, THE PROVIDER SHALL D ISCLOSE: 13
(1) THE AMOUNT OF THE NEW OR RENEWAL COMMERCIA L FINANCING 14
THAT WILL BE USED TO PAY OFF THE PORTION OF THE EXISTING COMMERCIAL 15
FINANCING THAT CONSI STS OF ANY REQUIRED PREPAYMENT CHARGES ; AND 16
(2) ANY UNPAID INTEREST T HAT WAS NOT FORGIVEN AT THE TIME 17
THE NEW OR RENEWAL C OMMERCIAL FINANCING WAS ENTERED INTO . 18
(C) (1) FOR FINANCING FOR WHI CH THE TOTAL REPAYME NT AMOUNT IS 19
CALCULATED AS A FIXE D AMOUNT, THE PREPAYMENT CHARG E IS EQUAL TO THE 20
ORIGINAL FINANCE CHA RGE MULTIPLIED BY TH E AMOUNT OF THE NEW OR 21
RENEWAL COMMERCIAL F INANCING USED TO PAY OFF THE EXISTING COM MERCIAL 22
FINANCING TRANSACTIO N AS A PERCENTAGE OF THE TOTAL REPAYMENT AMOUNT , 23
MINUS ANY PORTION OF THE TOTAL REPAYMENT AMOUNT FORGIVEN BY T HE 24
PROVIDER AT THE TIME OF PREPAYMENT . 25
(2) IF THE PREPAYMENT CHA RGE IS MORE THAN ZER O, THE 26
PROVIDER SHALL RECOR D THE AMOUNT AS THE ANSWER TO THE FOLLOW ING 27
QUESTION: 28
“DOES THE NEW OR RENEWAL C OMMERCIAL FINANCING TRANSACTION INCLUDE 29
ANY AMOUNT THAT IS U SED TO PAY UNPAID FI NANCE CHARGE OR FEES , ALSO 30
KNOWN AS DOUBLE DIPP ING? YES, [ENTER AMOUNT ]”. 31
(D) IF THE DISBURSEMENT A MOUNT OF THE NEW OR RENEWAL 32
COMMERCIAL FINANCING TRANSACTION WILL BE REDUCED TO PAY DOWN ANY 33
UNPAID PORTION OF TH E OUTSTANDING BALANC E OF THE EXISTING CO MMERCIAL 34 20 SENATE BILL 825
FINANCING, THE PROVIDER SHALL D ISCLOSE THE ACTUAL D OLLAR AMOUNT BY 1
WHICH THE DISBURSEMENT AMO UNT WILL BE REDUCED . 2
12–1112. 12–1111. 3
A RECIPIENT SHALL SIGN , MANUALLY OR ELECTRON ICALLY, EACH 4
APPLICABLE DISCLOSUR E REQUIRED UNDER THI S SUBTITLE BEFORE A PROVIDER 5
MAY ALLOW THE RECIPI ENT TO PROCEED WITH THE COMMERCIAL FINAN CING 6
APPLICATION. 7
12–1113. 12–1112. 8
(A) (1) NOTHING IN THIS SUBTI TLE MAY BE CONSTRUED TO PREVENT A 9
PROVIDER FROM DISCLO SING ADDITIONAL INFO RMATION TO A RECIPIE NT 10
REGARDING A COMMERCI AL FINANCING TRANSAC TION. 11
(2) IF A PROVIDER PROVIDE S ADDITIONAL DISCLOS URES TO A 12
RECIPIENT OTHER THAN WHAT IS REQUIRED BY THIS SUBTITLE, THE ADDITIONAL 13
DISCLOSURE IS NOT CO NSIDERED A REQUIRED DISCLOSURE UNDER THI S SUBTITLE. 14
(B) (1) IF ADDITIONAL METRICS OF FINANCING COSTS A RE DISCLOSED 15
OR USED IN THE APPLI CATION PROCESS FOR C OMMERCIAL FINANCING , THE 16
ADDITIONAL METRICS M AY NOT BE PRESENTED AS A RATE IF THEY AR E NOT THE 17
ANNUAL INTEREST RATE OR THE ANNUAL PERCEN TAGE RATE. 18
(2) THE TERM “INTEREST”, WHEN USED TO DESCRIB E A PERCENTAGE 19
RATE, MAY BE USED ONLY TO DESCRIBE ANNUALIZED PERCENTAGE RATES , 20
INCLUDING THE ANNUAL INTEREST RATE . 21
(C) IF A PROVIDER STATES A RATE OF FINANCE CH ARGE OR A FINANCING 22
AMOUNT TO A RECIPIEN T DURING THE APPLICA TION PROCESS FOR COM MERCIAL 23
FINANCING, THE PROVIDER SHALL A LSO STATE THE RATE A S AN “ANNUAL 24
PERCENTAGE RATE”, USING THAT TERM OR T HE ABBREVIATION “APR”. 25
12–1114. 12–1113. 26
(A) TO CARRY OUT THIS SUB TITLE, THE COMMISSIONER SHALL AD OPT 27
REGULATIONS SUBSTANT IALLY THE SAME AS RE GULATIONS ADOPTED BY THE NEW 28
YORK STATE DEPARTMENT OF FINANCIAL SERVICES REGARD ING COMMERCIAL 29
FINANCING. 30
(B) THE COMMISSIONER SHALL AP PROVE THE USE OF COM MERCIAL 31
FINANCING DISCLOSURE FORMS APPROVED FOR U SE IN OTHER STATES W ITH 32 SENATE BILL 825 21
COMMERCIAL FINANCING DISCLOSURE REQUIREME NTS THAT ARE SUBSTAN TIALLY 1
SIMILAR TO OR EXCEED THE REQUIREMENTS OF THIS SUBTITLE. 2
12–1115. 12–1114. 3
(A) A VIOLATION OF THIS SU BTITLE IS AN UNFAIR , ABUSIVE, OR DECEPTIVE 4
TRADE PRACTICE WITHI N THE MEANING OF TITLE 13 OF THE COMMERCIAL LAW 5
ARTICLE AND IS SUBJEC T TO THE ENFORCEMENT AND PENALTY PROVISIO NS 6
CONTAINED IN TITLE 13 OF THE COMMERCIAL LAW ARTICLE. 7
(B) (A) (1) THE COMMISSIONER SHALL IM POSE A CIVIL PENALTY , NOT 8
EXCEEDING: 9
(I) $2,000, FOR EACH VIOLATION O F THIS SUBTITLE; AND 10
(II) $10,000, FOR EACH WILLFUL VIO LATION OF THIS SUBTI TLE. 11
(2) THE COMMISSIONER MAY ORDE R ADDITIONAL RELIEF , 12
INCLUDING RESTITUTIO N OR A PERMANENT OR PRELIMINARY INJUNCTI ON ON 13
BEHALF OF A RECIPIEN T AFFECTED BY A VIOL ATION OF THIS SUBTIT LE. 14
(C) (B) IF A COMPLAINT ABOUT A VIOLATION OF THIS SUBTITLE IS FILED 15
WITH THE COMMISSIONER, THE COMMISSIONER MAY INVE STIGATE THE COMPLAIN T 16
AND USE ANY OF THE I NVESTIGATIVE AND ENF ORCEMENT POWERS PROV IDED 17
UNDER TITLE 2, SUBTITLE 1 OF THIS ARTICLE. 18
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 19
October 1, 2022. 20
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.