- Summary
- Actions
- Committee Votes
- Floor Votes
- Memo
- Text
- LFIN
- Chamber Video/Transcript
S05470 Summary:
BILL NO | S05470B |
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SAME AS | SAME AS A10118-A |
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SPONSOR | THOMAS |
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COSPNSR | CARLUCCI, KAPLAN, LIU, MYRIE, RAMOS |
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MLTSPNSR | |
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Add Art 8 801 - 812, Fin Serv L | |
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Requires certain providers that extend specific terms of commercial financing to a recipient to disclose certain information about the offer to the recipient, including information concerning the financing amount, finance charges, the annual percentage rate, the total repayment amount, the term, payment amounts, other potential fees, any prepayment costs and a description of any collateral requirements. |
S05470 Actions:
BILL NO | S05470B | |||||||||||||||||||||||||||||||||||||||||||||||||
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05/01/2019 | REFERRED TO BANKS | |||||||||||||||||||||||||||||||||||||||||||||||||
01/08/2020 | REFERRED TO BANKS | |||||||||||||||||||||||||||||||||||||||||||||||||
03/13/2020 | AMEND (T) AND RECOMMIT TO BANKS | |||||||||||||||||||||||||||||||||||||||||||||||||
03/13/2020 | PRINT NUMBER 5470A | |||||||||||||||||||||||||||||||||||||||||||||||||
07/13/2020 | AMEND AND RECOMMIT TO BANKS | |||||||||||||||||||||||||||||||||||||||||||||||||
07/13/2020 | PRINT NUMBER 5470B | |||||||||||||||||||||||||||||||||||||||||||||||||
07/21/2020 | REPORTED AND COMMITTED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
07/22/2020 | ORDERED TO THIRD READING CAL.886 | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | PASSED SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | DELIVERED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | referred to codes | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | substituted for a10118a | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | ordered to third reading rules cal.264 | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
07/23/2020 | returned to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
12/11/2020 | DELIVERED TO GOVERNOR | |||||||||||||||||||||||||||||||||||||||||||||||||
12/23/2020 | SIGNED CHAP.369 | |||||||||||||||||||||||||||||||||||||||||||||||||
12/23/2020 | APPROVAL MEMO.65 |
S05470 Committee Votes:
Go to topS05470 Floor Votes:
Yes
Abbate
Yes
Crouch
Yes
Garbarino
Yes
Lupardo
Yes
Pheffer Amato
Yes
Solages
Yes
Abinanti
Yes
Cruz
No
Giglio
Yes
Magnarelli
Yes
Pichardo
Yes
Stec
Yes
Arroyo
Yes
Cusick
Yes
Glick
No
Malliotakis
Yes
Pretlow
Yes
Steck
Yes
Ashby
Yes
Cymbrowitz
No
Goodell
No
Manktelow
Yes
Quart
Yes
Stern
Yes
Aubry
Yes
Darling
Yes
Gottfried
Yes
McDonald
Yes
Ra
Yes
Stirpe
No
Barclay
Yes
Davila
Yes
Griffin
Yes
McDonough
Yes
Ramos
No
Tague
Yes
Barnwell
Yes
De La Rosa
Yes
Gunther
Yes
McMahon
No
Reilly
Yes
Taylor
Yes
Barrett
Yes
DenDekker
No
Hawley
Yes
Mikulin
Yes
Reyes
Yes
Thiele
Yes
Barron
No
DeStefano
Yes
Hevesi
Yes
Miller B
ER
Richardson
Yes
Vanel
Yes
Benedetto
Yes
Dickens
Yes
Hunter
Yes
Miller MG
Yes
Rivera
No
Walczyk
Yes
Bichotte
Yes
Dilan
Yes
Hyndman
Yes
Miller ML
Yes
Rodriguez
Yes
Walker
Yes
Blake
Yes
Dinowitz
Yes
Jacobson
No
Montesano
Yes
Rosenthal D
Yes
Wallace
Yes
Blankenbush
No
DiPietro
Yes
Jaffee
Yes
Morinello
Yes
Rosenthal L
Yes
Walsh
Yes
Brabenec
Yes
D'Urso
Yes
Jean-Pierre
Yes
Mosley
Yes
Rozic
Yes
Weinstein
Yes
Braunstein
Yes
Eichenstein
Yes
Johns
Yes
Niou
Yes
Ryan
Yes
Weprin
Yes
Bronson
Yes
Englebright
Yes
Jones
Yes
Nolan
Yes
Salka
Yes
Williams
Yes
Buchwald
Yes
Epstein
Yes
Joyner
No
Norris
ER
Santabarbara
Yes
Woerner
Yes
Burke
Yes
Fahy
Yes
Kim
Yes
O'Donnell
Yes
Sayegh
Yes
Wright
Yes
Buttenschon
Yes
Fall
Yes
Kolb
Yes
Ortiz
ER
Schimminger
Yes
Zebrowski
Yes
Byrne
Yes
Fernandez
Yes
Lalor
Yes
Otis
Yes
Schmitt
Yes
Mr. Speaker
No
Byrnes
ER
Finch
Yes
Lavine
Yes
Palmesano
Yes
Seawright
Yes
Cahill
No
Fitzpatrick
Yes
Lawrence
Yes
Palumbo
Yes
Simon
Yes
Carroll
No
Friend
Yes
Lentol
Yes
Paulin
Yes
Simotas
Yes
Colton
Yes
Frontus
Yes
Lifton
Yes
Peoples-Stokes
Yes
Smith
Yes
Cook
Yes
Galef
Yes
LiPetri
Yes
Perry
Yes
Smullen
‡ Indicates voting via videoconference
S05470 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 5470--B 2019-2020 Regular Sessions IN SENATE May 1, 2019 ___________ Introduced by Sens. THOMAS, CARLUCCI, KAPLAN, RAMOS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- recommitted to the Committee on Banks in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the financial services law, in relation to requiring certain providers that extend specific terms of commercial financing to a recipient to disclose certain information about the offer to the recipient The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The financial services law is amended by adding a new arti- 2 cle 8 to read as follows: 3 ARTICLE 8 4 COMMERCIAL FINANCING 5 Section 801. Definitions. 6 802. Exemptions. 7 803. Sales-based financing disclosure requirements. 8 804. Closed-end commercial financing disclosure requirements. 9 805. Open-end commercial financing disclosure requirements. 10 806. Factoring transaction disclosure requirements. 11 807. Other forms of financing disclosure requirements. 12 808. Disclosure requirements for renewal financing. 13 809. Required signature. 14 810. Additional information. 15 811. Rules and regulations. 16 812. Penalties. 17 § 801. Definitions. For the purposes of this article: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11387-05-0S. 5470--B 2 1 (a) "Factoring transaction" means an accounts receivable purchase 2 transaction that includes an agreement to purchase, transfer, or sell a 3 legally enforceable claim for payment held by a recipient for goods the 4 recipient has supplied or services the recipient has rendered that have 5 been ordered but for which payment has not yet been made. 6 (b) "Commercial financing" means open-end financing, closed-end 7 financing, sales-based financing, factoring transaction, or other form 8 of financing, the proceeds of which the recipient does not intend to use 9 primarily for personal, family or household purposes. For purposes of 10 determining whether a financing is a commercial financing, the provider 11 may rely on any statement of intended purposes by the recipient. The 12 statement may be a separate statement signed by the recipient; may be 13 contained in the financing application, financing agreement, or other 14 document signed or consented to by the recipient; or may be provided 15 orally by the recipient so long as it is documented in the recipient's 16 application file by the provider. Electronic signatures and consents are 17 valid for purposes of the foregoing sentence. The provider shall not be 18 required to ascertain that the proceeds of a commercial financing are 19 used in accordance with the recipient's statement of intended purposes. 20 (c) "Open-end financing" means an agreement for one or more extensions 21 of open-end credit, secured or unsecured, the proceeds of which the 22 recipient does not intend to use primarily for personal, family or 23 household purposes. "Open-end financing" includes credit extended by a 24 provider under a plan in which: (i) the provider reasonably contemplates 25 repeated transactions; (ii) the provider may impose a finance charge 26 from time to time on an outstanding unpaid balance; and (iii) the amount 27 of credit that may be extended to the recipient during the term of the 28 plan (up to any limit set by the provider) is generally made available 29 to the extent that any outstanding balance is repaid. 30 (d) "Closed-end financing" means a closed-end extension of credit, 31 secured or unsecured, including equipment financing that does not meet 32 the definition of a lease under section 2-A-103 of the uniform commer- 33 cial code, the proceeds of which the recipient does not intend to use 34 primarily for personal, family or household purposes. "Closed-end 35 financing" includes financing with an established principal amount and 36 duration. 37 (e) "Finance charge" means the cost of financing as a dollar amount. 38 It includes any charge payable directly or indirectly by the recipient 39 and imposed directly or indirectly by the provider as an incident to or 40 a condition of the extension of financing. It includes all charges that 41 would be included under 12 C.F.R. part 1026.4 as if the transaction were 42 subject to 12 C.F.R. part 1026.4. In addition, the finance charge shall 43 include any charges as determined by the superintendent. For the 44 purposes of an open-end financing, the finance charge shall assume the 45 maximum amount of credit available to the recipient, in each case, is 46 drawn and held for the duration of the term or draw period. For the 47 purposes of a factoring transaction, the finance charge includes the 48 discount taken on the face value of the accounts receivable. 49 (f) "Financial institution" means any of the following: (i) a bank, 50 trust company, or industrial loan company doing business under the 51 authority of, or in accordance with, a license, certificate or charter 52 issued by the United States, this state or any other state, district, 53 territory, or commonwealth of the United States that is authorized to 54 transact business in this state; (ii) a federally chartered savings and 55 loan association, federal savings bank or federal credit union that is 56 authorized to transact business in this state; or (iii) a savings andS. 5470--B 3 1 loan association, savings bank or credit union organized under the laws 2 of this or any other state that is authorized to transact business in 3 this state. 4 (g) "Person" means an individual, corporation, partnership, limited 5 liability company, joint venture, association, joint stock company, 6 trust or unincorporated organization including, but not limited to, a 7 sole proprietorship. 8 (h) "Provider" means a person who extends a specific offer of commer- 9 cial financing to a recipient. Unless otherwise exempt, "provider" also 10 includes a person who solicits and presents specific offers of commer- 11 cial financing on behalf of a third party. For the avoidance of doubt, 12 the extension of a specific offer or provision of disclosures for a 13 commercial financing, in and of itself, shall not be construed to mean 14 that a provider is originating, making, funding or providing commercial 15 financing. 16 (i) "Recipient" means a person who applies for commercial financing 17 and is made a specific offer of commercial financing by a provider. A 18 recipient may also be an authorized representative of such person. A 19 person acting as a broker cannot be a recipient. 20 (j) "Sales-based financing" means a transaction that is repaid by the 21 recipient to the provider, over time, as a percentage of sales or reven- 22 ue, in which the payment amount may increase or decrease according to 23 the volume of sales made or revenue received by the recipient. Sales- 24 based financing also includes a true-up mechanism where the financing is 25 repaid as a fixed payment but provides for a reconciliation process that 26 adjusts the payment to an amount that is a percentage of sales or reven- 27 ue. 28 (k) "Specific offer" means the specific terms of commercial financing, 29 including price or amount, that is quoted to a recipient, based on 30 information obtained from, or about the recipient, which, if accepted by 31 a recipient, shall be binding on the provider, as applicable, subject to 32 any specific requirements stated in such terms. 33 § 802. Exemptions. This article shall not apply to, and shall not 34 place any additional requirements or obligations upon, any of the 35 following: 36 (a) a financial institution; 37 (b) a person acting in its capacity as a technology services provider, 38 such as licensing software and providing support services, to an entity 39 exempt under this section for use as part of the exempt entity's commer- 40 cial financing program, provided such person has no interest, or 41 arrangement or agreement to purchase any interest in the commercial 42 financing extended by the exempt entity in connection with such program; 43 (c) a lender regulated under the federal Farm Credit Act (12 U.S.C. 44 Sec. 2001 et seq.); 45 (d) a commercial financing transaction secured by real property; 46 (e) a lease as defined in section 2-A-103 of the uniform commercial 47 code; 48 (f) any person or provider who makes no more than five commercial 49 financing transactions in this state in a twelve-month period; or 50 (g) an individual commercial financing transaction in an amount over 51 five hundred thousand dollars. 52 § 803. Sales-based financing disclosure requirements. A provider 53 subject to this article shall provide the following disclosures to a 54 recipient at the time of extending a specific offer of sales-based 55 financing according to formatting prescribed by the superintendent:S. 5470--B 4 1 (a) The total amount of the commercial financing, and the disbursement 2 amount, if different from the financing amount, after any fees deducted 3 or withheld at disbursement. 4 (b) The finance charge. 5 (c) The estimated annual percentage rate, using the words annual 6 percentage rate or the abbreviation "APR", expressed as a yearly rate, 7 inclusive of any fees and finance charges, and calculated in accordance 8 with the federal Truth in Lending Act, Regulation Z, 12 C.F.R. § 9 1026.22, based on the estimated term of repayment and the projected 10 periodic payment amounts. The estimated term of repayment and the 11 projected periodic payment amounts shall be calculated based on the 12 projection of the recipient's sales, called the projected sales volume. 13 The projected sales volume may be calculated using the historical method 14 or the opt-in method. The provider shall provide notice to the super- 15 intendent on which method they intend to use across all instances of 16 sales-based financing offered in calculating estimated annual percentage 17 rate pursuant to this section. 18 (i) The provider using the historical method shall use an average 19 historical volume of sales or revenue by which the financing's payment 20 amounts are based and the estimated annual percentage rate is calcu- 21 lated. The provider shall fix the historical time period used to calcu- 22 late the average historical volume and use such period for all disclo- 23 sure purposes for all sales-based financing products offered. The fixed 24 historical time period shall either be the preceding time period from 25 the specific offer or, alternatively, the provider may use average sales 26 for the same number of months with the highest sales volume within the 27 past twelve months. The fixed historical time period shall be no less 28 than one month and not exceed twelve months. 29 (ii) The provider using the opt-in method shall determine the esti- 30 mated annual percentage rate, the estimated term, and the projected 31 payments, using a projected sales volume that the provider elects for 32 each disclosure, provided, that they participate in a review process 33 prescribed by the superintendent. A provider shall, on an annual basis, 34 report data to the superintendent of estimated annual percentage rates 35 disclosed to the recipient and actual retrospective annual percentage 36 rates of completed transactions. The report shall contain such informa- 37 tion as the superintendent, by rule or regulation, may prescribe as 38 necessary or appropriate for the purpose of making a determination of 39 whether the deviation between the estimated annual percentage rate and 40 actual retrospective annual percentage rates of completed transactions 41 was reasonable. The superintendent shall establish the method of report- 42 ing and may, upon a finding that the use of projected sales volume by 43 the provider has resulted in an unacceptable deviation between estimated 44 and actual annual percentage rate, require the provider to use the 45 historical method. The superintendent may consider unusual and extraor- 46 dinary circumstances impacting the provider's deviation between esti- 47 mated and actual annual percentage rate in the determination of such 48 finding. 49 (d) The total repayment amount, which is the disbursement amount plus 50 the finance charge. 51 (e) The estimated term is the period of time required for the periodic 52 payments, based on the projected sales volume, to equal the total amount 53 required to be repaid. 54 (f) The payment amounts, based on the projected sales volume: 55 (i) for payment amounts that are fixed, the payment amounts and 56 frequency (e.g., daily, weekly, monthly), and, if the payment frequencyS. 5470--B 5 1 is other than monthly, the amount of the average projected payments per 2 month; or 3 (ii) for payment amounts that are variable, a payment schedule or a 4 description of the method used to calculate the amounts and frequency of 5 payments, and the amount of the average projected payments per month. 6 (g) A description of all other potential fees and charges not included 7 in the finance charge, including, but not limited to, draw fees, late 8 payment fees, and returned payment fees. 9 (h) Were the recipient to elect to pay off or refinance the commercial 10 financing prior to full repayment, the provider must disclose: 11 (i) whether the recipient would be required to pay any finance charges 12 other than interest accrued since their last payment. If so, disclosure 13 of the percentage of any unpaid portion of the finance charge and maxi- 14 mum dollar amount the recipient could be required to pay; and 15 (ii) whether the recipient would be required to pay any additional 16 fees not already included in the finance charge. 17 (i) A description of collateral requirements or security interests, if 18 any. 19 § 804. Closed-end commercial financing disclosure requirements. A 20 provider, subject to this article, shall provide the following disclo- 21 sures to a recipient at the time of extending a specific offer for 22 closed-end financing according to formatting prescribed by the super- 23 intendent: 24 (a) The total amount of the commercial financing, and the disbursement 25 amount, if different from the financing amount, after any fees deducted 26 or withheld at disbursement. 27 (b) The finance charge. 28 (c) The annual percentage rate, using only the words annual percentage 29 rate or the abbreviation "APR", expressed as a yearly rate, inclusive of 30 any fees and finance charges that cannot be avoided by a recipient, and 31 calculated in accordance with the federal Truth in Lending Act, Regu- 32 lation Z, 12 C.F.R. § 1026.22. 33 (d) The total repayment amount, which is the disbursement amount plus 34 the finance charge. 35 (e) The term of the financing. 36 (f) The payment amounts: 37 (i) for payment amounts that are fixed, the payment amounts and 38 frequency (e.g., daily, weekly, monthly), and, if the term is longer 39 than one month, the average monthly payment amount; or 40 (ii) for payment amounts that are variable, a full payment schedule or 41 a description of the method used to calculate the amounts and frequency 42 of payments, and, if the term is longer than one month, the estimated 43 average monthly payment amount. 44 (g) A description of all other potential fees and charges that can be 45 avoided by the recipient, including, but not limited to, late payment 46 fees and returned payment fees. 47 (h) Were the recipient to elect to pay off or refinance the commercial 48 financing prior to full repayment, the provider must disclose: 49 (i) whether the recipient would be required to pay any finance charges 50 other than interest accrued since their last payment. If so, disclosure 51 of the percentage of any unpaid portion of the finance charge and maxi- 52 mum dollar amount the recipient could be required to pay; and 53 (ii) whether the recipient would be required to pay any additional 54 fees not already included in the finance charge. 55 (i) A description of collateral requirements or security interests, if 56 any.S. 5470--B 6 1 § 805. Open-end commercial financing disclosure requirements. A 2 provider, subject to this article, shall provide the following disclo- 3 sures to a recipient at the time of extending a specific offer for open- 4 end financing according to formatting prescribed by the superintendent: 5 (a) The maximum amount of credit available to the recipient (e.g., the 6 credit line amount), and the amount scheduled to be drawn by the recipi- 7 ent at the time the offer is extended, if any, less any fees deducted or 8 withheld at disbursement. 9 (b) The finance charge. 10 (c) The annual percentage rate, using only the words annual percentage 11 rate or the abbreviation "APR", expressed as a nominal yearly rate, 12 inclusive of any fees and finance charges that cannot be avoided by a 13 recipient, and calculated in accordance with the federal Truth in Lend- 14 ing Act, Regulation Z, 12 C.F.R. § 1026.22 and based on the maximum 15 amount of credit available to the recipient and the term resulting from 16 making the minimum required payments term as disclosed. 17 (d) The total repayment amount, which is the draw amount, less any 18 fees deducted or withheld at disbursement, plus the finance charge. The 19 total repayment amount shall assume a draw amount equal to the maximum 20 amount of credit available to the recipient if drawn and held for the 21 duration of the term or draw period. 22 (e) The term of the plan, if applicable, or the period over which a 23 draw is amortized. 24 (f) The payment frequency and amounts, based on the assumptions used 25 in the calculation of the annual percentage rate, including a 26 description of payment amount requirements such as a minimum payment 27 amount, and if the payment frequency is other than monthly, the amount 28 of the average projected payments per month. For payment amounts that 29 are variable, the provider should include a payment schedule, or a 30 description of the method used to calculate the amounts and frequency of 31 payments, and the estimated average monthly payment amount. 32 (g) A description of all other potential fees and charges that can be 33 avoided by the recipient, including, but not limited to, draw fees, late 34 payment fees, and returned payment fees. 35 (h) Were the recipient to elect to pay off or refinance the commercial 36 financing prior to full repayment, the provider must disclose: 37 (i) whether the recipient would be required to pay any finance charges 38 other than interest accrued since their last payment. If so, disclosure 39 of the percentage of any unpaid portion of the finance charge and maxi- 40 mum dollar amount the recipient could be required to pay; and 41 (ii) whether the recipient would be required to pay any additional 42 fees not already included in the finance charge. 43 (i) A description of collateral requirements or security interests, if 44 any. 45 § 806. Factoring transaction disclosure requirements. A provider, 46 subject to this article, shall provide the following disclosures to a 47 recipient at the time of extending a specific offer for a factoring 48 transaction according to formatting prescribed by the superintendent: 49 (a) The amount of the receivables purchase price paid to the recipient 50 and, if different from the purchase price, the amount disbursed to the 51 recipient after any fees deducted or withheld at disbursement. 52 (b) The finance charge. 53 (c) The estimated annual percentage rate, using that term, calculated 54 according to the federal Truth in Lending Act, Regulation Z, 12 C.F.R. § 55 1026 Appendix J, as a "single advance, single payment transaction". To 56 calculate the estimated annual percentage rate, the purchase amount isS. 5470--B 7 1 considered the financing amount, the purchase amount minus the finance 2 charge is considered the payment amount, and the term is established by 3 the payment due date of the receivables. As an alternate method of 4 establishing the term, the provider may estimate the term for a factor- 5 ing transaction as the average payment period, its historical data over 6 a period not to exceed the previous twelve months, concerning payment 7 invoices paid by the party owing the accounts receivable in question. 8 (d) The total payment amount, which is the purchase amount plus the 9 finance charge. 10 (e) A description of all other potential fees and charges that can be 11 avoided by the recipient. 12 (f) A description of the receivables purchased and any additional 13 collateral requirements or security interests. 14 § 807. Other forms of financing disclosure requirements. The super- 15 intendent may require disclosure by a provider extending a specific 16 offer of commercial financing which is not open-end financing, closed- 17 end financing, sales-based financing, or factoring transaction but 18 otherwise meets the definition of commercial financing as provided in 19 this article. Subject to such rules and regulations by the superinten- 20 dent, a provider subject to this article shall provide the following 21 disclosures to a recipient at the time of extending a specific offer of 22 other forms of financing according to formatting prescribed by the 23 superintendent: 24 (a) The total amount of the commercial financing, and the disbursement 25 amount, if different from the financing amount, after any fees deducted 26 or withheld at disbursement. 27 (b) The finance charge. 28 (c) The annual percentage rate, using only the words annual percentage 29 rate or the abbreviation "APR", expressed as a yearly rate, inclusive of 30 any fees and finance charges, and calculated in accordance with the 31 relevant sections of the federal Truth in Lending Act, Regulation Z or 32 this article. 33 (d) The total repayment amount which is the disbursement amount plus 34 the finance charge. 35 (e) The term of the financing. 36 (f) The payment amounts: 37 (i) for payment amounts that are fixed, the payment amounts and 38 frequency (e.g., daily, weekly, monthly), and the average monthly 39 payment amount; or 40 (ii) for payment amounts that are variable, a payment schedule or a 41 description of the method used to calculate the amounts and frequency of 42 payments, and the estimated average monthly payment amount. 43 (g) A description of all other potential fees and charges that can be 44 avoided by the recipient, including, but not limited to, late payment 45 fees and returned payment fees. 46 (h) Were the recipient to elect to pay off or refinance the commercial 47 financing prior to full repayment, the provider must disclose: 48 (i) whether the recipient would be required to pay any finance charges 49 other than interest accrued since their last payment. If so, disclosure 50 of the percentage of any unpaid portion of the finance charge and maxi- 51 mum dollar amount the recipient could be required to pay; and 52 (ii) whether the recipient would be required to pay any additional 53 fees not already included in the finance charge. 54 (i) A description of collateral requirements or security interests, if 55 any.S. 5470--B 8 1 § 808. Disclosure requirements for renewal financing. If, as a condi- 2 tion of obtaining the commercial financing, the provider requires the 3 recipient to pay off the balance of an existing commercial financing 4 from the same provider, the provider must disclose: 5 (a) The amount of the new commercial financing that is used to pay off 6 the portion of the existing commercial financing that consists of 7 prepayment charges required to be paid and any unpaid interest expense 8 that was not forgiven at the time of renewal. For financing for which 9 the total repayment amount is calculated as a fixed amount, the prepay- 10 ment charge is equal to the original finance charge multiplied by the 11 amount of the renewal used to pay off existing financing as a percentage 12 of the total repayment amount, minus any portion of the total repayment 13 amount forgiven by the provider at the time of prepayment. If the amount 14 is more than zero, such amount shall be the answer to the following 15 question: 16 "Does the renewal financing include any amount that is used to pay 17 unpaid finance charge or fees, also known as double dipping? Yes, {enter 18 amount}. If the amount is zero, the answer would be No." 19 (b) If the disbursement amount will be reduced to pay down any unpaid 20 portion of the outstanding balance, the actual dollar amount by which 21 such disbursement amount will be reduced. 22 § 809. Required signature. The provider shall obtain the recipient's 23 signature, which may be fulfilled by an electronic signature, on all 24 disclosures required to be presented to the recipient by this article 25 before authorizing the recipient to proceed further with the commercial 26 financing transaction application. 27 § 810. Additional information. Nothing in this article shall prevent a 28 provider from providing or disclosing additional information on a 29 commercial financing being offered to a recipient, provided however, 30 that such additional information shall not be disclosed as part of the 31 disclosure required by this article. If other metrics of financing cost 32 are disclosed or used in the application process of a commercial financ- 33 ing, these metrics shall not be presented as a "rate" if they are not 34 the annual interest rate or the annual percentage rate. The term "inter- 35 est", when used to describe a percentage rate, shall only be used to 36 describe annualized percentage rates, such as the annual interest rate. 37 When a provider states a rate of finance charge or a financing amount to 38 a recipient during an application process for commercial financing, the 39 provider shall also state the rate as an "annual percentage rate", using 40 that term or the abbreviation "APR". 41 § 811. Rules and regulations. The superintendent is hereby authorized 42 and empowered to promulgate such rules and regulations as may in the 43 judgment of the superintendent be consistent with the purposes of this 44 article, or appropriate for the effective administration of this arti- 45 cle, including, but not limited to: 46 (a) Such rules and regulations in connection with the calculation or 47 determination of any metric required to be disclosed to a recipient. 48 (b) Such rules and regulations as necessary to develop and prescribe 49 disclosure formatting to be used by providers that allows for recipients 50 to easily compare financing options in a clear and conspicuous manner. 51 Such rules and regulations shall include the designation and method for 52 disclosing the information required in this article, or approving 53 adequate forms and methods already used by providers. 54 (c) Such rules and regulations as may define the terms used in this 55 article and as may be necessary and appropriate to interpret and imple- 56 ment the provisions of this article.S. 5470--B 9 1 (d) Such rules and regulations as may be necessary for the enforcement 2 of this article. 3 § 812. Penalties. (a) Upon a finding by the superintendent that a 4 provider has violated the provisions of this article or the rules or 5 regulations promulgated hereunder, the provider shall be ordered to pay 6 to the people of this state a civil penalty for each violation of this 7 article or any regulation or policy promulgated hereunder a sum not to 8 exceed two thousand dollars for each violation or where such violation 9 is willful ten thousand dollars for each violation. 10 (b) In addition to any penalty imposed pursuant to subdivision (a) of 11 this section, upon a finding by the superintendent that a provider has 12 knowingly violated this article, the superintendent may order additional 13 relief, including, but not limited to, a permanent or preliminary 14 injunction on behalf of any recipient affected by the violation. 15 § 2. This act shall take effect on the one hundred eightieth day after 16 it shall have become a law.