Maryland 2024 Regular Session

Maryland House Bill HB574 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	hb0574
6	6
7	7	HOUSE BILL 574
8	8	I1 4lr2570
9	9	CF SB 509
10	10	By: Delegate Fraser–Hidalgo
11	11	Introduced and read first time: January 24, 2024
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	Commercial Financing – Small Business Truth in Lending Act 2
19	19
20	20	FOR the purpose of regulating commercial financing transactions, including by 3
21	21	establishing requirements related to disclosures, calculations of annual percentage 4
22	22	rates, terms of repayments, and other related items, and the extension of specific 5
23	23	offers; and generally relating to commercial financing transactions. 6
24	24
25	25	BY adding to 7
26	26	Article – Financial Institutions 8
27	27	Section 12–1201 through 12–1214 to be under the new subtitle “Subtitle 12. 9
28	28	Commercial Financing” 10
29	29	Annotated Code of Maryland 11
30	30	(2020 Replacement Volume and 2023 Supplement) 12
31	31
32	32	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
33	33	That the Laws of Maryland read as follows: 14
34	34
35	35	Article – Financial Institutions 15
36	36
37	37	SUBTITLE 12. COMMERCIAL FINANCING. 16
38	38
39	39	12–1201. 17
40	40
41	41	(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 18
42	42	INDICATED. 19
43	43
44	44	(B) (1) “CLOSED–END FINANCING ” MEANS A CLOSED –END EXTENSION OF 20
45	45	CREDIT, SECURED OR UNSECURED , INCLUDING EQUIPMENT FINANCING, THAT: 21
46	46	2 HOUSE BILL 574
47	47
48	48
49	49	(I) DOES NOT MEET THE DEF INITION OF A LEASE U NDER 1
50	50	ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE; AND 2
51	51
52	52	(II) THE PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND 3
53	53	TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSE S. 4
54	54
55	55	(2) “CLOSED–END FINANCING ” INCLUDES FINANCING THAT H AS AN 5
56	56	ESTABLISHED PRINCIPA L AMOUNT AND DURATIO N. 6
57	57
58	58	(C) “COMMERCIAL FINANCING ” MEANS OPEN –END FINANCING , 7
59	59	CLOSED–END FINANCING , SALES–BASED FINANCING , A FACTORING TRANSACT ION, 8
60	60	OR ANOTHER FORM OF F INANCING, THE PROCEEDS OF WHIC H THE RECIPIENT DOES 9
61	61	NOT INTEND TO USE PR IMARILY FOR PERSONAL , FAMILY, OR HOUSEHOLD 10
62	62	PURPOSES. 11
63	63
64	64	(D) “FACTORING TRANSACTION ” MEANS AN ACCOUNTS RE CEIVABLE 12
65	65	PURCHASE TRANSACTION : 13
66	66
67	67	(1) THAT INCLUDES AN AGRE EMENT TO PURCHASE , TRANSFER, OR 14
68	68	SELL A LEGALLY ENFOR CEABLE CLAIM FOR PAYMENT HE LD BY A RECIPIENT FO R 15
69	69	GOODS THE RECIPIENT HAS SUPPLIED OR SERV ICES THE RECIPIENT H AS RENDERED 16
70	70	THAT HAVE BEEN ORDER ED BUT FOR WHICH PAY MENT HAS NOT BEEN MA DE; AND 17
71	71
72	72	(2) THE PROCEEDS OF WHICH THE RECIPIENT DOES N OT INTEND TO 18
73	73	USE PRIMARIL Y FOR PERSONAL , FAMILY, OR HOUSEHOLD PURPOSE S. 19
74	74
75	75	(E) (1) “FINANCE CHARGE ” MEANS THE COST OF CO MMERCIAL 20
76	76	FINANCING REPRESENTE D AS A DOLLAR AMOUNT . 21
77	77
78	78	(2) “FINANCE CHARGE ” INCLUDES: 22
79	79
80	80	(I) A CHARGE PAYABLE DIREC TLY OR INDIRECTLY BY A 23
81	81	RECIPIENT AND IMPOSE D DIRECTLY OR INDIRECTLY BY A PROVIDER AS AN 24
82	82	INCIDENT TO OR A CON DITION OF THE EXTENS ION OF COMMERCIAL FI NANCING; 25
83	83
84	84	(II) A CHARGE THAT WOULD BE INCLUDED UNDER 12 C.F.R. § 26
85	85	1026.4 IF A TRANSACTION WER E SUBJECT TO 12 C.F.R. § 1026.4; AND 27
86	86
87	87	(III) ANY ADDITIONA L CHARGES DETERMINED BY THE 28
88	88	COMMISSIONER . 29
89	89
90	90	(F) (1) “OPEN–END FINANCING ” MEANS AN AGREEMENT F OR ONE OR 30
91	91	MORE EXTENSIONS OF S ECURED OR UNSECURED OPEN–END CREDIT , THE 31 HOUSE BILL 574 3
92	92
93	93
94	94	PROCEEDS OF WHICH A RECIPIENT DOES NOT I NTEND TO USE PRIMARI LY FOR 1
95	95	PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES . 2
96	96
97	97	(2) “OPEN–END FINANCING ” INCLUDES CREDIT EXTE NDED BY A 3
98	98	PROVIDER UNDER A PLA N IN WHICH: 4
99	99
100	100	(I) THE PROVIDER REASONAB LY CONTEMPLATES REPE ATED 5
101	101	TRANSACTIONS ; 6
102	102
103	103	(II) THE PROVIDER MAY IMPO SE A FINANCE CHARGE ON AN 7
104	104	OUTSTANDING UNPAID BALANCE; AND 8
105	105
106	106	(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO A 9
107	107	RECIPIENT DURING THE TERM OF THE PLAN , UP TO A LIMIT THAT T HE PROVIDER 10
108	108	SETS, IS GENERALLY MADE AV AILABLE TO THE EXTEN T THAT ANY OUTSTANDI NG 11
109	109	BALANCE IS REPAID . 12
110	110
111	111	(G) (1) “PROVIDER” MEANS A PERSON THAT EXTEND S A SPECIFIC OFFER 13
112	112	OF COMMERCIAL FINANC ING TO A RECIPIENT . 14
113	113
114	114	(2) “PROVIDER” INCLUDES A PERSON TH AT SOLICITS AND PRES ENTS 15
115	115	A SPECIFIC OFFER OF COMMERCIAL FINANCING ON BEHALF OF A THIRD PARTY. 16
116	116
117	117	(H) (1) “RECIPIENT” MEANS A PERSON , OR THE PERSON’S AUTHORIZED 17
118	118	REPRESENTATIVE , THAT APPLIES FOR COM MERCIAL FINANCING AN D IS MADE A 18
119	119	SPECIFIC OFFER OF CO MMERCIAL FINANCING B Y A PROVIDER. 19
120	120
121	121	(2) “RECIPIENT” DOES NOT INCLUDE A P ERSON ACTING AS A 20
122	122	BROKER. 21
123	123
124	124	(I) (1) “SALES–BASED FINANCING ” MEANS A TRANSAC TION: 22
125	125
126	126	(I) THAT IS REPAID BY A RECIPIENT TO A PROVID ER OVER TIME 23
127	127	AS A PERCENTAGE OF S ALES OR REVENUE , IN WHICH THE PAYMENT AMOUNT MAY 24
128	128	INCREASE OR DECREASE ACCORDING TO THE VOL UME OF SALES MADE OR REVENUE 25
129	129	RECEIVED BY THE RECI PIENT; AND 26
130	130
131	131	(II) THE PROCE EDS OF WHICH THE REC IPIENT DOES NOT 27
132	132	INTEND TO USE PRIMAR ILY FOR PERSONAL , FAMILY, OR HOUSEHOLD PURPOSE S. 28
133	133
134	134	(2) “SALES–BASED FINANCING ” INCLUDES A TRANSACTI ON 29
135	135	CONTAINING A TRUE –UP MECHANISM UNDER W HICH THE FINANCING I S REPAID AS 30
136	136	A FIXED PAYMENT BUT PROVIDES FOR A RECONCILIATI ON PROCESS THAT ADJU STS 31
137	137	THE PAYMENT TO AN AM OUNT THAT IS A PERCE NTAGE OF SALES OR RE VENUE. 32 4 HOUSE BILL 574
138	138
139	139
140	140
141	141	(J) “SPECIFIC OFFER ” MEANS THE TERMS OF C OMMERCIAL FINANCING 1
142	142	THAT ARE QUOTED TO A RECIPIENT, BASED ON INFORMATION OBTAINED FROM OR 2
143	143	ABOUT THE RE CIPIENT, WHICH IF ACCEPTED BY THE RECIPIENT ARE BI NDING ON A 3
144	144	PROVIDER, AS APPLICABLE, SUBJECT TO REQUIREME NTS STATED IN THE TE RMS OF 4
145	145	THE COMMERCIAL FINAN CING. 5
146	146
147	147	12–1202. 6
148	148
149	149	THIS SUBTITLE DOES NO T APPLY TO: 7
150	150
151	151	(1) (I) A FEDERAL OR STATE BANK, CREDIT UNION , OR SAVINGS 8
152	152	ASSOCIATION; OR 9
153	153
154	154	(II) A SUBSIDIARY OR AFFILI ATE OF AN ORGANIZATI ON LISTED 10
155	155	IN ITEM (I) OF THIS ITEM; 11
156	156
157	157	(2) A PERSON ACTING AS A T ECHNOLOGY SERVICES P ROVIDER TO AN 12
158	158	ENTITY EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE ENTIT Y’S 13
159	159	COMMERCIAL FINANCING PROGRAM IF THE PERSON DOES NOT HAVE AN INTEREST , 14
160	160	ARRANGEMENT , OR AGREEMENT TO PURC HASE ANY INTEREST IN THE COMMERCIAL 15
161	161	FINANCING EXTENDED B Y THE ENTITY IN CONN ECTION WITH THE COMM ERCIAL 16
162	162	FINANCING PROGRAM ; 17
163	163
164	164	(3) A LENDER REGULATED UND ER THE FEDERAL FARM CREDIT ACT; 18
165	165
166	166	(4) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL 19
167	167	PROPERTY; 20
168	168
169	169	(5) A LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM 21
170	170	COMMERCIAL CODE; 22
171	171
172	172	(6) A PROVIDER OR OTHER PE RSON WHO MAKES NOT M ORE THAN 23
173	173	FIVE COMMERCIAL FINA NCING TRANSAC TIONS IN THE STATE IN A 12–MONTH 24
174	174	PERIOD; 25
175	175
176	176	(7) A COMMERCIAL FINANCING TRANSACTION MORE THA N 26
177	177	$2,500,000; 27
178	178
179	179	(8) A COMMERCIAL FINANCING TRANSACTION : 28
180	180
181	181	(I) IN WHICH THE RECIPIEN T IS: 29
182	182	HOUSE BILL 574 5
183	183
184	184
185	185	1. A DEALER, OR AN AFFILIATE OF A DEALER, AS 1
186	186	DEFINED IN § 11–111 OF THE TRANSPORTATION ARTICLE; OR 2
187	187
188	188	2. A RENTAL VEHICLE COMPA NY, OR AN AFFILIATE OF A 3
189	189	RENTAL VEHICLE COMPA NY, AS DEFINED IN § 18–108 OF THE TRANSPORTATION 4
190	190	ARTICLE; AND 5
191	191
192	192	(II) MADE UNDER A COMMERCI AL FINANCING AGREEME NT OR 6
193	193	COMMERCIAL OPEN –END CREDIT PLAN OF AT LEAST $50,000, INCLUDING A 7
194	194	COMMERCIAL LOAN MADE IN ACCORDANCE WITH T HE COMMERCIAL FINANC ING 8
195	195	TRANSACTION ; OR 9
196	196
197	197	(9) A COMMERCIAL FINANCING TRANSACTION THAT IS A FACTORING 10
198	198	TRANSACTION , AN ADVANCE , OR A SIMILAR TRANSAC TION OF ACCOUNTS 11
199	199	RECEIVABLE OWED T O A HEALTH CARE PROV IDER BECAUSE OF A PA TIENT’S 12
200	200	PERSONAL INJURY TREA TED BY THE HEALTH CA RE PROVIDER. 13
201	201
202	202	12–1203. 14
203	203
204	204	(A) EXCEPT AS PROVIDED IN § 12–1207 OF THIS SUBTITLE , FOR PURPOSES 15
205	205	OF THIS SUBTITLE, AN ANNUAL PERCENTAGE RATE SHALL BE: 16
206	206
207	207	(1) EXPRESSED AS A YEARLY RATE , INCLUDING ALL FEES A ND 17
208	208	FINANCE CHARGES ; AND 18
209	209
210	210	(2) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH IN 19
211	211	LENDING ACT. 20
212	212
213	213	(B) IN ADDITION TO THE RE QUIREMENTS OF SUBSEC TION (A)(2) OF THIS 21
214	214	SECTION, AN ANNUAL PERCENTAGE RATE SHALL BE CALCUL ATED BASED ON THE 22
215	215	ESTIMATED TERM OF RE PAYMENT AND THE PROJ ECTED PERIODIC PAYME NT 23
216	216	AMOUNTS OF A COMMERC IAL FINANCING TRANSA CTION, REGARDLESS OF WHETHE R 24
217	217	FEDERAL LAW OR REGUL ATION WOULD REQUIRE AN ANNUAL PERCENTAGE RATE TO 25
218	218	BE CALCULATED FOR A CERTAIN TRANSACTION . 26
219	219
220	220	(C) THIS SECTION MAY NOT BE CONSTRUED TO IMPO SE ANY LIABILITY ON A 27
221	221	PROVIDER THAT CHARGE S AN ANNUAL PERCENTA GE RATE THAT DIFFERS FROM THE 28
222	222	ESTIMATED ANNUAL PER CENTAGE RATE DISCLOS ED BY THE PROVIDER I N 29
223	223	ACCORDANCE WITH THIS SUBTITLE OR ANY REGU LATION ADOPTED UNDER THIS 30
224	224	SUBTITLE. 31
225	225
226	226	12–1204. 32
227	227	6 HOUSE BILL 574
228	228
229	229
230	230	(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 1
231	231	INDICATED. 2
232	232
233	233	(2) “ESTIMATED TERM OF REP AYMENT” MEANS THE AMOUNT OF 3
234	234	TIME REQUIRED FOR TH E PERIODIC PAYMENTS MADE BY A RECIPIENT IN A 4
235	235	SALES–BASED FINANCING TRAN SACTION TO EQUAL THE TOTAL AMOUNT REQUIRED 5
236	236	TO BE REPAID. 6
237	237
238	238	(3) “TOTAL REPAYMENT AMOUN T” MEANS THE DISBURSEME NT 7
239	239	AMOUNT OF A SALES –BASED FINANCING TRAN SACTION PLUS THE FIN ANCE CHARGE . 8
240	240
241	241	(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 9
242	242	A RECIPIENT WH EN EXTENDING A SPECI FIC OFFER OF SALES –BASED FINANCING : 10
243	243
244	244	(I) THE TOTAL AMOUNT OF T HE SALES–BASED FINANCING AND 11
245	245	THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 12
246	246	MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 13
247	247
248	248	(II) THE FINANCE CHA RGE; 14
249	249
250	250	(III) THE ESTIMATED ANNUAL PERCENTAGE RATE OF T HE 15
251	251	SALES–BASED FINANCING , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 16
252	252	ABBREVIATION “APR”; 17
253	253
254	254	(IV) THE TOTAL REPAYMENT A MOUNT; 18
255	255
256	256	(V) THE ESTIMATED TERM OF REPAYMENT ; 19
257	257
258	258	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 20
259	259	PROJECTED PERIODIC P AYMENT AMOUNTS ; 21
260	260
261	261	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 22
262	262	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 23
263	263	PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 24
264	264
265	265	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 25
266	266	REQUIREMENTS OR SECU RITY INTERESTS. 26
267	267
268	268	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 27
269	269	SHALL DISCLOSE : 28
270	270
271	271	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 29
272	272	HOUSE BILL 574 7
273	273
274	274
275	275	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 1
276	276	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 2
277	277
278	278	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 3
279	279	SHALL DISCLOSE : 4
280	280
281	281	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 5
282	282	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 6
283	283
284	284	2. THE AMOUNT OF THE AVE RAGE PROJECTED 7
285	285	PAYMENTS PER MONTH . 8
286	286
287	287	(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE SALES–BASED 9
288	288	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 10
289	289	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 11
290	290	PAY: 12
291	291
292	292	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 13
293	293	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 14
294	294
295	295	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 15
296	296	CHARGE. 16
297	297
298	298	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 17
299	299	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SIN CE THE RECIPIENT ’S 18
300	300	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 19
301	301	PORTION OF THE FINAN CE CHARGE AND THE MA XIMUM DOLLAR AMOUNT THE 20
302	302	RECIPIENT COULD BE R EQUIRED TO PAY . 21
303	303
304	304	12–1205. 22
305	305
306	306	(A) (1) A PROVIDER SHALL USE T HE PROJECTED SALES V OLUME OF A 23
307	307	RECIPIENT TO CALCULA TE THE FOLLOWING INF ORMATION RELATED TO A 24
308	308	SALES–BASED FINANCING TRAN SACTION: 25
309	309
310	310	(I) THE ESTIMATED TERM OF REPAYMENT AND THE 26
311	311	PROJECTED PAYMENT AM OUNTS OF A SALES–BASED FINANCING TRAN SACTION; AND 27
312	312
313	313	(II) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A 28
314	314	SALES–BASED FINANCING TRAN SACTION. 29
315	315
316	316	(2) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A SALES–BASED 30
317	317	FINANCING TRANSACTIO N SHALL BE CALCULATE D: 31
318	318	8 HOUSE BILL 574
319	319
320	320
321	321	(I) IN ACCORDANCE WITH TH E FEDERAL TRUTH IN LENDING 1
322	322	ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 2
323	323
324	324	(II) BASED ON THE ESTIMATE D TERM OF REPAYMENT AND 3
325	325	PROJECTED SALES VOLU ME OF A RECIPIENT . 4
326	326
327	327	(B) (1) A PROVIDER MAY CALCULA TE THE PROJECTED SAL ES VOLUME OF 5
328	328	A RECIPIENT USING EI THER THE HISTORICAL METHOD OR THE OPT –IN METHOD. 6
329	329
330	330	(2) (I) A PROVIDER THAT USES T HE HISTORICAL METHOD TO 7
331	331	CALCULATE THE PROJEC TED SALES VOLUME OF A RECIPIENT SHALL US E AN 8
332	332	AVERAGE HISTORICAL V OLUME OF SALES OR RE VENUE. 9
333	333
334	334	(II) A PROVIDER SHALL FIX T HE HISTORICAL TIME P ERIOD 10
335	335	USED TO CALCULATE THE AVE RAGE HISTORICAL VOLU ME AND USE THE SAME TIME 11
336	336	PERIOD FOR ALL DISCL OSURE PURPOSES FOR A NY SALES–BASED FINANCING 12
337	337	TRANSACTION PRODUCTS OFFERED. 13
338	338
339	339	(III) EXCEPT AS PROVIDED IN SUBPARAGRAPH (IV) OF THIS 14
340	340	PARAGRAPH , THE FIXED HISTORICAL TIME PERIOD: 15
341	341
342	342	1. MAY NOT BE LESS THAN 1 MONTH AND MAY NOT 16
343	343	EXCEED 12 MONTHS; AND 17
344	344
345	345	2. SHALL BE THE TIME PER IOD DIRECTLY BEFORE THE 18
346	346	SPECIFIC OFFER WAS M ADE. 19
347	347
348	348	(IV) A PROVIDER MAY CHOOSE TO USE THE AVERAGE S ALES FOR 20
349	349	THE SAME NUMBER OF M ONTHS AS THE PROVID ER WOULD HAVE USED U NDER 21
350	350	SUBPARAGRAPH (III) OF THIS PARAGRAPH WI TH THE HIGHEST SALES VOLUME 22
351	351	WITHIN THE PAST 12 MONTHS. 23
352	352
353	353	(3) A PROVIDER MAY USE THE OPT–IN METHOD TO DETERMI NE THE 24
354	354	INFORMATION LISTED U NDER SUBSECTION (A)(1) OF THIS SECTION BY U SING A 25
355	355	PROJECTED SALES VOLU ME THAT THE PROVIDER CHOOSES FOR EACH DIS CLOSURE 26
356	356	IF THE RECIPIENT PAR TICIPATES IN A REVIE W PROCESS ESTABLISHE D BY THE 27
357	357	COMMISSIONER . 28
358	358
359	359	(C) A PROVIDER SHALL NOTIF Y THE COMMISSIONER WHICH OF THE TWO 29
360	360	METHODS THE PROVIDER INTENDS TO USE WHEN CALCULATING THE ESTI MATED 30
361	361	ANNUAL PERCENTAGE OF EACH SALES–BASED FINANCING TRAN SACTION. 31
362	362
363	363	(D) (1) ON OR BEFORE JANUARY 1 EACH YEAR, A PROVIDER SHALL 32
364	364	REPORT TO THE COMMISSIONER ON : 33 HOUSE BILL 574 9
365	365
366	366
367	367
368	368	(I) THE ESTIMATED ANNUAL PERCENTAGE RATES GIV EN TO 1
369	369	EACH RECIPIENT ; AND 2
370	370
371	371	(II) THE ACTUAL ANNUAL PER CENTAGE RATES OF EAC H 3
372	372	COMPLETED SALES –BASED FINANCING TRAN SACTION. 4
373	373
374	374	(2) (I) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 5
375	375	SUBSECTION SHALL CON TAIN ANY INFORMATION THE COMMISSIONER CONSIDER S 6
376	376	NECESSARY TO DETERMI NE WHETHER TH E DEVIATION BETWEEN THE ESTIMATED 7
377	377	ANNUAL PERCENTAGE RA TES AND ACTUAL ANNUA L PERCENTAGE RATES O F 8
378	378	COMPLETED SALES –BASED FINANCING TRAN SACTIONS IS REASONAB LE. 9
379	379
380	380	(II) THE COMMISSIONER MAY CONS IDER EXTRAORDINARY 10
381	381	CIRCUMSTANCES WHEN D ETERMINING WHETHER T HE PROV IDER’S DEVIATION 11
382	382	BETWEEN THE ESTIMATE D ANNUAL PERCENTAGE RATE AND ACTUAL ANNU AL 12
383	383	PERCENTAGE RATE OF A SALES–BASED FINANCING TRAN SACTION IS REASONABL E. 13
384	384
385	385	(III) IF THE COMMISSIONER FINDS TH AT THERE WAS AN 14
386	386	UNREASONABLE DEVIATI ON BETWEEN ESTIMATED AND ACTUAL ANNUAL 15
387	387	PERCENTAGE RATES OF SALES–BASED FINANCING TRAN SACTIONS, THE 16
388	388	COMMISSIONER MAY REQU IRE THE PROVIDER TO USE THE HISTORICAL M ETHOD 17
389	389	INSTEAD OF THE OPT –IN METHOD IN DETERMI NING THE PROJECTED S ALES VOLUME 18
390	390	OF THE RECIPIENT . 19
391	391
392	392	12–1206. 20
393	393
394	394	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 21
395	395	DISBURSEMENT AMOUNT OF A CLOSED–END FINANCING TRANSA CTION PLUS THE 22
396	396	FINANCE CHARGE . 23
397	397
398	398	(B) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO 24
399	399	A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR CLOSED –END FINANCING : 25
400	400
401	401	(I) THE TOTAL AMOUNT OF T HE CLOSED–END FINANCING AND 26
402	402	THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 27
403	403	MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 28
404	404
405	405	(II) THE TOTAL REPAYMENT A MOUNT; 29
406	406
407	407	(III) THE FINANCE CHARGE ; 30
408	408	10 HOUSE BILL 574
409	409
410	410
411	411	(IV) THE ANNUAL PERCENTAGE RA TE OF THE CLOSED –END 1
412	412	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 2
413	413	ABBREVIATION “APR”; 3
414	414
415	415	(V) THE TERM OF THE FINAN CING; 4
416	416
417	417	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 5
418	418	PROJECTED PERIODIC P AYMENT AMOUNTS ; 6
419	419
420	420	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 7
421	421	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES , LATE 8
422	422	PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 9
423	423
424	424	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 10
425	425	REQUIREMENTS OR SECU RITY INTERESTS. 11
426	426
427	427	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 12
428	428	SHALL DISCLOSE : 13
429	429
430	430	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 14
431	431
432	432	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 15
433	433	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 16
434	434
435	435	(II) FOR PAYMENT AMO UNTS THAT ARE VARIAB LE, A PROVIDER 17
436	436	SHALL DISCLOSE : 18
437	437
438	438	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 19
439	439	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 20
440	440
441	441	2. THE AMOUNT OF THE AVE RAGE PROJECTED 21
442	442	PAYMENTS PER MONTH . 22
443	443
444	444	(3) THE ANNUAL PE RCENTAGE RATE REQUIR ED TO BE DISCLOSED 23
445	445	UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION S HALL BE: 24
446	446
447	447	(I) EXPRESSED AS A YEARLY RATE, INCLUSIVE OF ANY FEE S 25
448	448	AND FINANCE CHARGES THAT CANNOT BE AVOID ED BY A RECIPIENT ; AND 26
449	449
450	450	(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 27
451	451	IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22, REGARDLESS OF 28
452	452	WHETHER FEDERAL LAW OR REGULATION WOULD REQUIRE THE CALCULAT ION. 29
453	453	HOUSE BILL 574 11
454	454
455	455
456	456	(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE CLOSED–END 1
457	457	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 2
458	458	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 3
459	459	PAY: 4
460	460
461	461	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 5
462	462	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 6
463	463
464	464	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 7
465	465	CHARGE. 8
466	466
467	467	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 9
468	468	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 10
469	469	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 11
470	470	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 12
471	471	RECIPIENT COULD BE REQ UIRED TO PAY. 13
472	472
473	473	12–1207. 14
474	474
475	475	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE DRAW 15
476	476	AMOUNT OF THE OPEN –END FINANCING TRANSA CTION, MINUS ANY FEES DEDUC TED 16
477	477	OR WITHHELD AT DISBU RSEMENT, PLUS THE FINANCE CHA RGE. 17
478	478
479	479	(B) (1) WHEN CALCULATIN G THE TOTAL REPAYMEN T AMOUNT IN 18
480	480	ACCORDANCE WITH THIS SECTION, A PROVIDER SHALL ASS UME A DRAW AMOUNT 19
481	481	EQUAL TO THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE TO THE RECIPI ENT IF 20
482	482	DRAWN AND HELD FOR T HE DURATION OF THE T ERM OR DRAW PERIOD . 21
483	483
484	484	(2) WHEN CALCULATING A FI NANCE CHARGE IN ACCO RDANCE WITH 22
485	485	THIS SECTION, A PROVIDER SHALL ASS UME THE MAXIMUM AMOU NT OF CREDIT 23
486	486	AVAILABLE TO THE REC IPIENT, IN EACH CASE , IS DRAWN AND HELD FO R THE 24
487	487	DURATION OF THE TERM OF THE DRAW PERIOD . 25
488	488
489	489	(C) (1) A PROVIDER SHALL DISCL OSE THE FOLLOWIN G INFORMATION TO 26
490	490	A RECIPIENT WHEN EXT ENDING A SPECIFIC OF FER FOR OPEN–END FINANCING : 27
491	491
492	492	(I) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE 28
493	493	RECIPIENT AND THE AM OUNT SCHEDULED TO BE DRAWN BY THE RECIPIE NT AT THE 29
494	494	TIME THE OFFER IS EX TENDED, IF ANY, MINUS ANY FEES DEDUCTED OR WIT HHELD 30
495	495	AT DISBURSEMENT ; 31
496	496
497	497	(II) THE FINANCE CHARGE ; 32
498	498
499	499	(III) THE TOTAL REPAYMENT A MOUNT; 33 12 HOUSE BILL 574
500	500
501	501
502	502
503	503	(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 1
504	504	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 2
505	505	ABBREVIATION “APR”; 3
506	506
507	507	(V) THE TERM OF THE PLAN , IF APPLICABLE, OR THE PERIOD 4
508	508	OVER WHICH A DRAW IS AMORTIZED; 5
509	509
510	510	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 6
511	511	PAYMENT FREQUENCY AN D AMOUNTS; 7
512	512
513	513	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 8
514	514	CHARGES NOT INCLUDED IN THE FINANCE CHARGE , INCLUDING DRAW FEES , LATE 9
515	515	PAYMENT FEES , AND RETURNED PAYMENT FEES; AND 10
516	516
517	517	(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 11
518	518	REQUIREMENTS OR SECU RITY INTERESTS. 12
519	519
520	520	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 13
521	521	SHALL DISCLOSE : 14
522	522
523	523	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 15
524	524
525	525	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 16
526	526	MONTHLY, THE AMOUNT OF THE AV ERAGE PROJECTED PAYM ENTS PER MONTH . 17
527	527
528	528	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 18
529	529	SHALL DISCLOSE : 19
530	530
531	531	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF T HE 20
532	532	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 21
533	533
534	534	2. THE AMOUNT OF THE AVE RAGE PROJECTED 22
535	535	PAYMENTS PER MONTH . 23
536	536
537	537	(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 24
538	538	UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION SHALL BE: 25
539	539
540	540	(I) EXPRESSED AS A NOMINA L YEARLY RATE , INCLUSIVE OF 26
541	541	ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECI PIENT; 27
542	542
543	543	(II) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH 28
544	544	IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 29
545	545	HOUSE BILL 574 13
546	546
547	547
548	548	(III) BASED ON THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE 1
549	549	TO THE RECIPIENT AND THE TERM RESULTING F ROM MAKING THE MINIM UM 2
550	550	REQUIRED PAYMENTS AS DISCLOSED, REGARDLESS OF WHETHE R FEDERAL LAW OR 3
551	551	REGULATION WOULD REQ UIRE THE CALCULATION . 4
552	552
553	553	(D) (1) IF A RECIPIENT PA YS OFF OR REFINANCES THE OPEN–END 5
554	554	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 6
555	555	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 7
556	556	PAY: 8
557	557
558	558	(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 9
559	559	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT; AND 10
560	560
561	561	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 11
562	562	CHARGE. 12
563	563
564	564	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 13
565	565	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 14
566	566	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENT AGE OF ANY UNPAID 15
567	567	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 16
568	568	RECIPIENT COULD BE R EQUIRED TO PAY . 17
569	569
570	570	12–1208. 18
571	571
572	572	(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 19
573	573	INDICATED. 20
574	574
575	575	(2) “FINANCE CHARGE ” INCLUDES A DISCOUNT TAKEN ON THE FACE 21
576	576	VALUE OF THE ACCOUNT S RECEIVABLE. 22
577	577
578	578	(3) “TOTAL PAYMENT AMOUNT ” MEANS THE PURCHASE A MOUNT OF 23
579	579	THE FACTORING TRANSA CTION PLUS THE FINAN CE CHARGE. 24
580	580
581	581	(B) A PROVIDER SHALL DISCL OSE THE FOLLOWING IN FORMATION TO A 25
582	582	RECIPIENT WHEN EXTEN DING A SPECIFIC OFFE R FOR A FACTORING TRAN SACTION: 26
583	583
584	584	(1) THE AMOUNT OF THE REC EIVABLES PURCHASE PR ICE PAID TO 27
585	585	THE RECIPIENT AND , IF DIFFERENT FROM TH E PURCHASE PRICE , THE 28
586	586	DISBURSEMENT AMOUNT AFTER ANY FEES DEDUC TED OR WITHHELD AT 29
587	587	DISBURSEMENT ; 30
588	588
589	589	(2) THE TOTAL PAYMENT AMO UNT; 31
590	590
591	591	(3) THE FINANCE CHARGE ; 32 14 HOUSE BILL 574
592	592
593	593
594	594
595	595	(4) THE ANNUAL PERCENTAGE RATE OF THE FACTORIN G 1
596	596	TRANSACTION , USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 2
597	597	ABBREVIATION “APR”, CALCULATED ACCORDING TO THE FEDERAL TRUTH IN 3
598	598	LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE 4
599	599	ADVANCE, SINGLE PAYMENT TRANS ACTION”; 5
600	600
601	601	(5) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND CHARGES 6
602	602	THAT CAN BE AVOIDED BY THE RECIPIENT ; AND 7
603	603
604	604	(6) A DESCRIPTION OF THE R ECEIVABLES PURCHASED AND, IF 8
605	605	APPLICABLE, ANY ADDITIONAL COLLATERAL REQUIREME NTS OR SECURITY 9
606	606	INTERESTS. 10
607	607
608	608	(C) (1) FOR PURPOSES OF THIS SUBSECTION, THE ANNUAL PERCENTAG E 11
609	609	RATE SHALL BE CALCUL ATED ACCORDING TO TH E FEDERAL TRUTH IN LENDING 12
610	610	ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE ADVANCE , 13
611	611	SINGLE PAYMENT TRANSACT ION”, REGARDLESS OF WHETHE R FEDERAL LAW OR 14
612	612	REGULATION WOULD REQ UIRE AN ANNUAL PERCE NTAGE RATE TO BE CAL CULATED 15
613	613	FOR A CERTAIN TRANSA CTION. 16
614	614
615	615	(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 17
616	616	PROVIDER SHALL USE T HE FOLLOWING INFO RMATION TO CALCULATE THE 18
617	617	ESTIMATED ANNUAL PER CENTAGE RATE IN ACCO RDANCE WITH THIS SEC TION: 19
618	618
619	619	1. THE PURCHASE AMOUNT I S THE FINANCING AMOU NT; 20
620	620
621	621	2. THE PAYMENT AMOUNT IS THE PURCHASE AMOUNT 21
622	622	MINUS THE FINANCE CH ARGE; AND 22
623	623
624	624	3. THE TERM OF THE FACTO RING TRANSACTION IS 23
625	625	DETERMINED BY THE PA YMENT DUE DATE OF TH E RECEIVABLES . 24
626	626
627	627	(II) A PROVIDER MAY ESTIMAT E THE TERM FOR A FAC TORING 25
628	628	TRANSACTION AS THE A VERAGE PAYMENT PERIO D, USING HISTORICAL DAT A OVER 26
629	629	A PERIOD NOT TO EXCE ED THE PREVIOUS 12 MONTHS, CONCERNIN G PAYMENT 27
630	630	INVOICES PAID BY THE PARTY OWING THE ACCO UNTS RECEIVABLE IN Q UESTION. 28
631	631
632	632	12–1209. 29
633	633
634	634	(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 30
635	635	DISBURSEMENT AMOUNT OF A COMMERCIAL FINA NCING TRANSACTION PL US THE 31
636	636	FINANCE CHARGE . 32
637	637	HOUSE BILL 574 15
638	638
639	639
640	640	(B) A PROVIDER MAY EXTE ND A SPECIFIC OFFER OF COMMERCIAL 1
641	641	FINANCING THAT IS NO T AN OPEN–END FINANCING , A CLOSED–END FINANCING , A 2
642	642	SALES–BASED FINANCING , OR A FACTORING TRANS ACTION BUT OTHERWISE MEETS 3
643	643	THE DEFINITION OF CO MMERCIAL FINANCING U NDER THIS SUBTITLE . 4
644	644
645	645	(C) (1) IF A PROVID ER EXTENDS A SPECIFI C OFFER THAT IS NOT AN 5
646	646	OPEN–END FINANCING , A CLOSED–END FINANCING , A SALES–BASED FINANCING , OR 6
647	647	A FACTORING TRANSACT ION BUT OTHERWISE ME ETS THE DEFINITION O F 7
648	648	COMMERCIAL FINANCING UNDER THIS SUBTITLE , THE PROVIDER SHALL D ISCLOSE: 8
649	649
650	650	(I) THE TOTAL AMOUNT OF T HE COMMERCIAL FINANC ING 9
651	651	INCLUDING THE DISBUR SEMENT AMOUNT , IF DIFFERENT FROM TH E FINANCING 10
652	652	AMOUNT, MINUS ANY FEES DEDUC TED OR WITHHELD AT D ISBURSEMENT ; 11
653	653
654	654	(II) THE TOTAL REPAYMENT A MOUNT; 12
655	655
656	656	(III) THE FINANCE CHARGE ; 13
657	657
658	658	(IV) THE ANNUAL PERCENTAGE RA TE OF THE COMMERCIAL 14
659	659	FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 15
660	660	ABBREVIATION “APR”, EXPRESSED AS A YEARL Y RATE, INCLUSIVE OF ANY FEE S 16
661	661	AND FINANCE CHARGES , AND CALCULATED IN AC CORDANCE WITH THE RE LEVANT 17
662	662	SECTIONS OF THE FE DERAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. § 18
663	663	1026.22, OR THIS ARTICLE , REGARDLESS OF WHETHE R FEDERAL LAW , THE 19
664	664	REGULATION , OR THIS ARTICLE WOUL D REQUIRE THE CALCUL ATION; 20
665	665
666	666	(V) THE TERM OF THE COMME RCIAL FINANCING ; 21
667	667
668	668	(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 22
669	669	PAYMENT FREQUENCY AN D AMOUNTS; 23
670	670
671	671	(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 24
672	672	CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING LATE PAYME NT 25
673	673	FEES AND RETURNED PA YMENT FEES; AND 26
674	674
675	675	(VIII) IF APPLICABLE , A DESCRIPTION OF COLLATERAL 27
676	676	REQUIREMENTS OR SECU RITY INTERESTS. 28
677	677
678	678	(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 29
679	679	SHALL DISCLOSE : 30
680	680
681	681	1. THE PAYMENT AMOUNTS A ND FREQUENCY ; AND 31
682	682	16 HOUSE BILL 574
683	683
684	684
685	685	2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 1
686	686	MONTHLY, THE AMOUNT OF THE AV ERAGE PRO JECTED PAYMENTS PER MONTH. 2
687	687
688	688	(II) FOR PAYMENT AMOUNTS T HAT ARE VARIABLE , A PROVIDER 3
689	689	SHALL DISCLOSE : 4
690	690
691	691	1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 5
692	692	METHOD USED TO CALCU LATE THE AMOUNTS AND FREQUENCY OF PAYMENT S; AND 6
693	693
694	694	2. THE AMOUNT OF THE AVE RAGE PROJECTED 7
695	695	PAYMENTS PER MONTH . 8
696	696
697	697	(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE COMMERCIAL 9
698	698	FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 10
699	699	PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 11
700	700	PAY: 12
701	701
702	702	(I) ANY FINANCE CHARGES OTHER THAN THE INTER EST 13
703	703	ACCRUED SINCE THE RE CIPIENT’S LAST PAYMENT ; AND 14
704	704
705	705	(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 15
706	706	CHARGE. 16
707	707
708	708	(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 17
709	709	FINANCE CHARGES OTHE R THAN THE INTEREST ACCRUED SINCE THE RE CIPIENT’S 18
710	710	LAST PAYMENT , A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 19
711	711	PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 20
712	712	RECIPIENT COULD BE R EQUIRED TO PAY . 21
713	713
714	714	12–1210. 22
715	715
716	716	(A) A PROVIDER MAY REQUIRE A RECIPIENT TO PAY O FF THE BALANCE OF 23
717	717	AN EXISTING COMMERCIAL FINANCING TRANSACTIO N FROM THE SAME PROV IDER 24
718	718	AS A CONDITION OF OB TAINING A NEW OR REN EWAL COMMERCIAL FINA NCING 25
719	719	TRANSACTION . 26
720	720
721	721	(B) IF A PROVIDER REQUIRE S A RECIPIENT TO PAY OFF A COMMERCIAL 27
722	722	FINANCING TRANSACTIO N BEFORE OBTAINING A NEW OR RENEWAL COMMERCIAL 28
723	723	FINANCING TRANSACTIO N, THE PROVIDER SHALL D ISCLOSE: 29
724	724
725	725	(1) THE AMOUNT OF THE NEW OR RENEWAL COMMERCIA L FINANCING 30
726	726	THAT WILL BE USED TO PAY OFF THE PORTION OF THE EXISTING COMM ERCIAL 31
727	727	FINANCING THAT CONSI STS OF ANY REQUIRED PREPAYMENT CHAR GES; AND 32
728	728	HOUSE BILL 574 17
729	729
730	730
731	731	(2) ANY UNPAID INTEREST T HAT WAS NOT FORGIVEN AT THE TIME 1
732	732	THE NEW OR RENEWAL C OMMERCIAL FINANCING WAS ENTERED INTO . 2
733	733
734	734	(C) (1) FOR FINANCING FOR WHI CH THE TOTAL REPAYME NT AMOUNT IS 3
735	735	CALCULATED AS A FIXE D AMOUNT, THE PREPAYMENT CHARG E IS EQUAL TO THE 4
736	736	ORIGINAL FINANCE CHA RGE MULTIPLIED BY TH E AMOUNT OF THE NEW OR 5
737	737	RENEWAL COMMERCIAL F INANCING USED TO PAY OFF THE EXISTING COM MERCIAL 6
738	738	FINANCING TRANSACTIO N AS A PERCENTAGE OF THE TOTAL REPAYMENT AMOUNT, 7
739	739	MINUS ANY PORTION OF THE TOTAL REPAYMENT AMOUNT FOR GIVEN BY THE 8
740	740	PROVIDER AT THE TIME OF PREPAYMENT . 9
741	741
742	742	(2) IF THE PREPAYMENT CHA RGE IS MORE THAN ZER O, THE 10
743	743	PROVIDER SHALL RECOR D THE AMOUNT AS THE ANSWER TO THE FOLLOW ING 11
744	744	QUESTION: 12
745	745
746	746	“DOES THE NEW OR RENEW AL COMMERCIAL FINANC ING TRANSACTION INCL UDE 13
747	747	ANY AMOUNT THAT IS USED TO PAY UNPAID FINANCE CHARG ES OR FEES, ALSO 14
748	748	KNOWN AS DOUBLE DIPP ING? YES, (ENTER AMOUNT )”. 15
749	749
750	750	(D) IF THE DISBURSEMENT A MOUNT OF THE NEW OR RENEWAL 16
751	751	COMMERCIAL FINANCING TRANSACTION WILL BE REDUCED TO PAY DOWN ANY 17
752	752	UNPAID PORTION OF TH E OUTSTANDIN G BALANCE OF THE EXI STING COMMERCIAL 18
753	753	FINANCING, THE PROVIDER SHALL D ISCLOSE THE ACTUAL D OLLAR AMOUNT BY 19
754	754	WHICH THE DISBURSEME NT AMOUNT WILL BE RE DUCED. 20
755	755
756	756	12–1211. 21
757	757
758	758	A RECIPIENT SHALL SIGN , MANUALLY OR ELECTRON ICALLY, EACH 22
759	759	APPLICABLE DISCLOSUR E REQUIRED UNDER THIS SUBTITLE BEFORE A PROVIDER 23
760	760	MAY ALLOW THE RECIPI ENT TO PROCEED WITH THE COMMERCIAL FINAN CING 24
761	761	APPLICATION. 25
762	762
763	763	12–1212. 26
764	764
765	765	(A) (1) NOTHING IN THIS SUBTI TLE MAY BE CONSTRUED TO PREVENT A 27
766	766	PROVIDER FROM DISCLO SING ADDITIONAL INFO RMATION TO A RECIPIE NT 28
767	767	REGARDING A COMMERCIAL FIN ANCING TRANSACTION . 29
768	768
769	769	(2) IF A PROVIDER PROVIDE S AN ADDITIONAL DISC LOSURE TO A 30
770	770	RECIPIENT OTHER THAN WHAT IS REQUIRED BY THIS SUBTITLE, THE ADDITIONAL 31
771	771	DISCLOSURE IS NOT CO NSIDERED A REQUIRED DISCLOSURE UNDER THI S SUBTITLE. 32
772	772
773	773	(B) (1) IF ADDITIONAL METRICS O F FINANCING COSTS AR E DISCLOSED 33
774	774	OR USED IN THE APPLI CATION PROCESS FOR C OMMERCIAL FINANCING , THE 34 18 HOUSE BILL 574
775	775
776	776
777	777	ADDITIONAL METRICS M AY NOT BE PRESENTED AS A RATE IF THEY AR E NOT THE 1
778	778	ANNUAL INTEREST RATE OR THE ANNUAL PERCEN TAGE RATE. 2
779	779
780	780	(2) THE TERM “INTEREST”, WHEN USED TO DESCRIB E A PERCENTAGE 3
781	781	RATE, MAY BE USED ONLY TO DESCRIBE ANNUAL PERC ENTAGE RATES , INCLUDING 4
782	782	THE ANNUAL INTEREST RATE. 5
783	783
784	784	(C) IF A PROVIDER STATES A RATE OF FINANCE CH ARGE OR A FINANCING 6
785	785	AMOUNT TO A RECIPIEN T DURING THE APPLICA TION PROCESS FOR COMMERCIAL 7
786	786	FINANCING, THE PROVIDER SHALL A LSO STATE THE RATE A S AN “ANNUAL 8
787	787	PERCENTAGE RATE ”, USING THAT TERM OR T HE ABBREVIATION “APR”. 9
788	788
789	789	12–1213. 10
790	790
791	791	(A) TO CARRY OUT THIS SUB TITLE, THE COMMISSIONER SHALL AD OPT 11
792	792	REGULATIONS SUBSTANT IALLY THE SAME AS REGULATIONS ADOPTED BY THE NEW 12
793	793	YORK STATE DEPARTMENT OF FINANCIAL SERVICES REGARDING CO MMERCIAL 13
794	794	FINANCING. 14
795	795
796	796	(B) THE COMMISSIONER SHALL AP PROVE THE USE OF COM MERCIAL 15
797	797	FINANCING DISCLOSURE FORMS APPROVED FOR U SE IN OTHER STATES W ITH 16
798	798	COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS THAT ARE SUBSTANTIAL LY 17
799	799	SIMILAR TO OR EXCEED THE REQUIREMENTS OF THIS SUBTITLE. 18
800	800
801	801	12–1214. 19
802	802
803	803	(A) (1) THE COMMISSIONER SHALL IM POSE A CIVIL PENALTY NOT 20
804	804	EXCEEDING: 21
805	805
806	806	(I) $2,000 FOR EACH VIOLATION O F THIS SUBTITLE; AND 22
807	807
808	808	(II) $10,000 FOR EACH WILLFUL VIOL ATION OF THIS SUBTIT LE. 23
809	809
810	810	(2) THE COMMISSIONER MAY ORDE R ADDITIONAL RELIEF , 24
811	811	INCLUDING RESTITUTIO N OR A PERMANENT OR PRELIMINARY INJUNCTI ON ON 25
812	812	BEHALF OF A RECIPIEN T AFFECTED BY A VIOL ATION OF THIS SUBTIT LE. 26
813	813
814	814	(B) IF A COMPLAINT ABOUT A VIOLATION OF THIS SU BTITLE IS FILED WITH 27
815	815	THE COMMISSIONER , THE COMMISSIONER MAY INVE STIGATE THE COMPLAIN T AND 28
816	816	USE ANY OF THE INVES TIGATIVE AND ENFORCE MENT POWERS PROVIDED UNDER 29
817	817	TITLE 2, SUBTITLE 1 OF THIS ARTICLE. 30
818	818
819	819	SECTION 2. AND BE IT FURTHER ENACTED, Th at this Act shall take effect 31
820	820	October 1, 2024. 32