Small Business Truth in Financing Act (H662) Summary

• Establishes the Small Business Truth in Financing Act requiring commercial financing providers to register with the North Carolina Commissioner of Banks and pay a $1,000 nonrefundable registration fee (renewable every 5 years).

• Mandates detailed disclosure requirements for sales-based, closed-end, open-end, and factoring commercial financing, including total amount, finance charge, annual percentage rate (APR), repayment terms, and potential fees.

• Exempts financial institutions, farm credit lenders, motor vehicle dealers, persons making five or fewer transactions annually, and consumer finance companies from the disclosure requirements.

• Exempts commercial financing transactions secured by real property, transactions over $500,000, leases, and motor vehicle sales from all requirements.

• Authorizes the Commissioner to assess civil penalties up to $2,000 per violation or $10,000 per willful violation, with enforcement powers to issue cease-and-desist orders following notice and hearing.

• Takes effect 60 days after enactment and applies to transactions occurring on or after that date.