Connecticut Revives Commercial Financing Disclosure Bill
March 3, 2022The State of Connecticut has resurrected its commercial financing disclosure bill, adding to the pile of states doing the same. Senate Bill 272 is a throwback to earlier versions of legislative drafting in that it contains the term “double dipping.”
The bill was only just reintroduced today, March 3rd, where it has been referred to the Joint Committee on Banking. When it was raised last year, it was met with fierce opposition.
The full text of the bill can be read here.
Even More Commercial Financing Disclosure Bills Emerge Across Additional States
February 9, 2022
It’s not just New York, New Jersey, California, Virginia, and Missouri with disclosure legislation out there anymore.
Utah – On Monday, the State Senate introduced the Commercial Financing Registration and Disclosure bill.
Maryland – On Monday, the State Senate introduced the Commercial Financing Transactions bill.
Mississippi – Last week, the State legislature introduced two commercial financing disclosure bills but both died in committee.
The Maryland Bill is the latest iteration of a multi-year campaign to pass legislation aimed at restricting MCAs in the state.
The bill in Virginia is still continuing to advance.
The bills in New York and California have already long ago passed and implementation of them as laws is still underway. The New York Department of Financial Services is expected to provide an updated proposal by the end of next month.
Register for The Webinar: Disclosures and Regulation From a General Counsel’s Perspective
February 3, 2022
Want to know what’s going on with the flood of disclosure bills and laws that are criss-crossing the nation? On February 10th, the Alternative Finance Bar Association will be hosting a webinar, titled Industry Superheroes: Disclosures and Regulation from a General Counsel’s Perspective.
According to the AFBA, “Some of the industry’s most talented General Counsel will discuss the practical challenges the Disclosure Laws present for Alternative Finance Companies.” Led by Jamie Polon, the webinar “will navigate these challenges and explore possible options for how to make strategic decisions that allow for sustainability and growth.”
AltFinanceDaily happily recommends this event.
Missouri Introduces Commercial Financing Disclosure Bill
January 25, 2022Add Missouri to the list of states proposing mandatory disclosures in commercial financing transactions.
[See: New York, California, New Jersey, Virginia, North Carolina]
Missouri’s SB 963 is different from bills in other states in that it does not seek the disclosure of an annual percentage rate. Adopting a simpler approach, SB 963 would require commercial financing companies to disclose:
1. The total amount of funds provided
2. The total amount of funds disbursed
3. The total amount to be paid
4. The total dollar cost
5. The manner, frequency, and amount of each payment
6. Prepayment costs or discounts
7. Whether or not a broker will be compensated
The bill was introduced by State Senator Justin Brown (R).
New Jersey Reintroduces Commercial Financing APR Disclosure Bill
January 20, 2022
Members of New Jersey’s state legislature are trying for a fifth year in a row to advance a commercial financing APR disclosure bill. Senate Bill 819 was introduced on January 18th. Senate Majority Whip Troy Singleton (D) is the primary sponsor.
Similar to what was just introduced in the Virginia legislature, the bill is mainly aimed at “sales-based financing.”
“Sales-based financing means a transaction that is repaid by the recipient to the provider, over time and as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient. ‘Sales-based financing’ includes a true-up mechanism where the financing is repaid as a fixed payment but provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue.”
Virginia Hops on the Commercial Finance APR Disclosure Bandwagon
January 14, 2022
Add Virginia to the list of states introducing initiatives to codify disclosures in commercial finance. Virginia House Bill 1027 is aimed squarely at “sales-based financing providers.”
The Virginia bill calls for an estimated APR to be disclosed on sales-based financing contracts using methods conceived in New York’s recent legislation.
As has been witnessed, however, New York’s regulators recently discovered weaknesses in their own law.
The Virginia bill is in its very early stages. It was introduced on Wednesday, January 12th by Delegate Kathy K.L. Tran (D).
New York’s Commercial Financing Disclosure Law to Undergo Further Comment and Review
January 4, 2022
Implementation of the New York Commercial Financing Disclosure law originally intended to go into effect four days ago, is now subject to another delay on top of the existing one, with no official date on when compliance will be required.
Seeing as the New York Department of Financial Services (DFS) was still accepting comments on the proposed regulation through December 20th, DFS had originally granted covered companies a six-month reprieve on compliance. But after having reviewed the comments, DFS determined that it’s actually back to the drawing board on a regulatory proposal. Sometime “early in the new year,” DFS said, it will publish a revised proposal for further public comment.
“Given the complexity of the disclosures required by the CDFL (Commercial Financing Disclosure Law), we believe the Legislature intended that the Department first provide regulatory guidance regarding the standardized disclosures required to be provided under the CDFL,” said Serwat Farooq, a Deputy Superintendent at DFS, in a published statement. “Waiting to commence CDFL obligations until implementing regulations are in place will ensure that the disclosures are made in a consistent, standardized fashion. This will help businesses understand the terms and conditions of the various forms of credit being offered to them, the very intent of the CDFL.”
New York DFS Provides New Guidance on Disclosure Law, 6 Month Delay
October 20, 2021
New York’s Department of Financial Services has provided updated guidance on the impending commercial finance disclosure law scheduled to go into effect on January 1st.
The main news? A six month delay.
“Financiers and brokers shall comply with disclosure requirements six months after the effective date,” the proposals state.
The comment period has also been corrected/extended to December 19, 2021. Comments are to be directed to George Bogdan at DFS.
The regulation’s draft has been amended as well and can be VIEWED HERE.
