Substitute Bill No. 272 - Summary

• Requires commercial financing providers to disclose specific terms including finance charges, annual percentage rates (APR), total repayment amounts, payment schedules, and collateral requirements to recipients before extending offers, effective October 1, 2022

• Establishes disclosure requirements tailored to four financing types: closed-end financing, open-end financing, sales-based financing, and factoring transactions, with distinct APR calculation methods

• For sales-based financing, allows providers to use either a historical method or opt-in method to calculate estimated APR, with providers using the opt-in method required to report actual versus estimated rates to the Banking Commissioner annually

• Requires providers to disclose early payoff/refinancing terms, including any prepayment penalties and fees, and mandates clear disclosure of bank account attachment waivers if included in financing agreements

• Imposes civil penalties of up to $2,000 per violation or $10,000 per willful violation, and authorizes the Banking Commissioner to order additional relief including injunctions for knowing violations