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SCS/SB 187 - This act creates the "Commercial Financing Disclosure Act". Under this act, any person who consummates more than 5 commercial financing products, as defined in the act, to a business located in this state in a calendar year is required to make certain disclosures to the business with regard to the product. Specifically, the provider is required to disclose the following: · The total amount of funds provided to the business under the terms of the commercial financing product; · The total amount of funds disbursed to the business under the terms of the commercial financing product, if less than the total amount of funds provided, as a result of any fees deducted or withheld at disbursement and any amount paid to a third party on behalf of the business; · The total amount to be paid to the provider pursuant to the commercial financing product agreement; · The total dollar cost of the commercial financing product under the terms of the agreement, derived by subtracting the total amount of funds provided from the total of payments; · The manner, frequency and amount of each payment; and · A statement of whether there are any costs or discounts associated with prepayment of the commercial financing product including a reference to the paragraph in the agreement that creates the contractual rights of the parties related to prepayment. The act requires registration with the Division of Finance prior to engaging in business as a commercial financial broker. Specifically, the act requires filing a registration form, submitting a fee of $100, and obtaining a surety bond in the amount of $10,000. A registration renewal is required every year, not later than January 31. Violations of this act are punishable by a fine of $500 per incident, not to exceed $20,000 for all aggregated violations. Any person who violates any provision of this act after receiving written notice of a prior violation from the Attorney General shall be punishable by a fine of $1,000 per incident, not to exceed $50,000 for all aggregated violations arising from the use of the transaction documentation or materials found to be in violation of this act. Violation of any provision of this act does not affect the enforceability or validity of the underlying agreement. This act does not create a private cause of action against any person or entity based upon noncompliance with this act. The Attorney General is given authority to enforce the provisions of this act. This act contains various exemptions. The registration and disclosure requirements of this act take effect either (1) 6 months after the Division of Finance finalizes promulgating rules, if the Division intends to promulgate rules; or (2) February 28, 2024, if the Division does not intend to promulgate rules. This act is substantially similar to SCS/SB 963 (2022), a provision in SCS/HB 2571 (2022), and HB 2706 (2022). SCOTT SVAGERA
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