S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10118
 
                           I N  A S S E M B L Y
 
                              March 12, 2020
                                ___________
 
 Introduced  by  M.  of  A.  ZEBROWSKI  --  read once and referred to the
   Committee on Banks
 
 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:
 
   Section 1. The financial services law is amended by adding a new arti-
 cle 7 to read as follows:
                                  ARTICLE 7
                           COMMERCIAL FINANCING
 SECTION 701. DEFINITIONS.
         702. EXEMPTIONS.
         703. SALES-BASED FINANCING DISCLOSURE REQUIREMENTS.
         704. CLOSED-END COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.
         705. OPEN-END COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.
         706. ACCOUNTS RECEIVABLE TRANSACTION DISCLOSURE REQUIREMENTS.
         707. OTHER FORMS OF FINANCING DISCLOSURE REQUIREMENTS.
         708. DISCLOSURE REQUIREMENTS FOR RENEWAL FINANCING.
         709. REQUIRED SIGNATURE.
         710. ADDITIONAL INFORMATION.
         711. RULES AND REGULATIONS.
         712. PENALTIES.
   § 701. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
   (A) "ACCOUNTS RECEIVABLE TRANSACTION"  MEANS  AN  ACCOUNTS  RECEIVABLE
 PURCHASE TRANSACTION, INCLUDING FACTORING TRANSACTIONS, THAT INCLUDES AN
 AGREEMENT TO PURCHASE, TRANSFER, OR SELL A LEGALLY ENFORCEABLE CLAIM FOR
 PAYMENT  HELD  BY  A  RECIPIENT  FOR GOODS THE RECIPIENT HAS SUPPLIED OR
 SERVICES THE RECIPIENT HAS RENDERED THAT HAVE BEEN ORDERED BUT FOR WHICH
 PAYMENT HAS NOT YET BEEN MADE.
   (B) "COMMERCIAL FINANCING" MEANS A COMMERCIAL LINE OF CREDIT,  CLOSED-
 END  CREDIT,  SALES-BASED FINANCING, ACCOUNTS RECEIVABLE TRANSACTION, OR
 OTHER FORM OF FINANCING, THE PROCEEDS OF WHICH THE  RECIPIENT  DOES  NOT
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15642-02-0

 A. 10118                            2
 
 INTEND  TO USE PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. FOR
 PURPOSES OF DETERMINING WHETHER A FINANCING IS A  COMMERCIAL  FINANCING,
 THE  PROVIDER  MAY  RELY  ON  ANY  STATEMENT OF INTENDED PURPOSES BY THE
 RECIPIENT.    THE  STATEMENT  MAY  BE A SEPARATE STATEMENT SIGNED BY THE
 RECIPIENT; MAY BE CONTAINED  IN  THE  FINANCING  APPLICATION,  FINANCING
 AGREEMENT, OR OTHER DOCUMENT SIGNED OR CONSENTED TO BY THE RECIPIENT; OR
 MAY  BE  PROVIDED ORALLY BY THE RECIPIENT SO LONG AS IT IS DOCUMENTED IN
 THE RECIPIENT'S APPLICATION FILE BY THE PROVIDER. ELECTRONIC  SIGNATURES
 AND  CONSENTS  ARE  VALID  FOR  PURPOSES  OF THE FOREGOING SENTENCE. THE
 PROVIDER SHALL NOT BE REQUIRED TO  ASCERTAIN  THAT  THE  PROCEEDS  OF  A
 COMMERCIAL  FINANCING ARE USED IN ACCORDANCE WITH THE RECIPIENT'S STATE-
 MENT OF INTENDED PURPOSES.
   (C) "COMMERCIAL LINE OF CREDIT" MEANS AN AGREEMENT  FOR  ONE  OR  MORE
 EXTENSIONS  OF  OPEN-END  CREDIT,  SECURED OR UNSECURED, THE PROCEEDS OF
 WHICH THE RECIPIENT DOES NOT INTEND TO USE PRIMARILY FOR PERSONAL, FAMI-
 LY OR HOUSEHOLD PURPOSES. A "COMMERCIAL LINE OF CREDIT" INCLUDES  CREDIT
 EXTENDED  BY  A CREDITOR UNDER A PLAN IN WHICH: (I) THE CREDITOR REASON-
 ABLY CONTEMPLATES REPEATED TRANSACTIONS; (II) THE CREDITOR MAY IMPOSE  A
 FINANCE  CHARGE  FROM TIME TO TIME ON AN OUTSTANDING UNPAID BALANCE; AND
 (III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO THE RECIPIENT  DURING
 THE  TERM OF THE PLAN (UP TO ANY LIMIT SET BY THE CREDITOR) IS GENERALLY
 MADE AVAILABLE TO THE EXTENT THAT ANY OUTSTANDING BALANCE IS REPAID.
   (D) "CLOSED-END  CREDIT"  MEANS  A  CLOSED-END  EXTENSION  OF  CREDIT,
 SECURED  OR  UNSECURED, INCLUDING EQUIPMENT FINANCING THAT DOES NOT MEET
 THE DEFINITION OF A LEASE UNDER SECTION 2-A-103 OF THE  UNIFORM  COMMER-
 CIAL  CODE,  THE  PROCEEDS OF WHICH THE RECIPIENT DOES NOT INTEND TO USE
 PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. "CLOSED-END  CRED-
 IT"  INCLUDES  FINANCING  WITH AN ESTABLISHED PRINCIPAL AMOUNT AND DURA-
 TION.
   (E) "CREDITOR" MEANS THE PERSON  TO  WHICH  THE  FINANCING  OBLIGATION
 UNDER  A  COMMERCIAL  LINE  OF  CREDIT OR CLOSED-END CREDIT IS INITIALLY
 OWED. FOR PURPOSES OF THIS ARTICLE, A CREDITOR MAY ALSO BE A PROVIDER.
   (F) "FINANCIAL INSTITUTION" MEANS ANY OF THE FOLLOWING:  (I)  A  BANK,
 TRUST  COMPANY,  OR  INDUSTRIAL  LOAN  COMPANY  DOING BUSINESS UNDER THE
 AUTHORITY OF, OR IN ACCORDANCE WITH, A LICENSE, CERTIFICATE  OR  CHARTER
 ISSUED  BY  THE  UNITED STATES, THIS STATE OR ANY OTHER STATE, DISTRICT,
 TERRITORY, OR COMMONWEALTH OF THE UNITED STATES THAT  IS  AUTHORIZED  TO
 TRANSACT  BUSINESS IN THIS STATE; (II) A FEDERALLY CHARTERED SAVINGS AND
 LOAN ASSOCIATION, FEDERAL SAVINGS BANK OR FEDERAL CREDIT UNION  THAT  IS
 AUTHORIZED  TO  TRANSACT  BUSINESS IN THIS STATE; OR (III) A SAVINGS AND
 LOAN ASSOCIATION, SAVINGS BANK OR CREDIT UNION ORGANIZED UNDER THE  LAWS
 OF  THIS  OR  ANY OTHER STATE THAT IS AUTHORIZED TO TRANSACT BUSINESS IN
 THIS STATE.
   (G) "PERSON" MEANS AN INDIVIDUAL,  CORPORATION,  PARTNERSHIP,  LIMITED
 LIABILITY  COMPANY,  JOINT  VENTURE,  ASSOCIATION,  JOINT STOCK COMPANY,
 TRUST OR UNINCORPORATED ORGANIZATION INCLUDING, BUT NOT  LIMITED  TO,  A
 SOLE PROPRIETORSHIP.
   (H)  "PROVIDER" MEANS A PERSON WHO EXTENDS A SPECIFIC OFFER OF COMMER-
 CIAL FINANCING TO A RECIPIENT. A PROVIDER  MAY  INCLUDE  A  CREDITOR  OR
 PURCHASER.    UNLESS OTHERWISE EXEMPT, "PROVIDER" ALSO INCLUDES A PERSON
 THAT IS NOT A CREDITOR  OR  PURCHASER  BUT  WHO  SOLICITS  AND  PRESENTS
 SPECIFIC  OFFERS OF COMMERCIAL FINANCING ON BEHALF OF A THIRD PARTY. FOR
 THE AVOIDANCE OF DOUBT, THE EXTENSION OF A SPECIFIC OFFER  OR  PROVISION
 OF  DISCLOSURES  FOR A COMMERCIAL FINANCING, IN AND OF ITSELF, SHALL NOT
 BE CONSTRUED TO MEAN THAT A PROVIDER IS ORIGINATING, MAKING, FUNDING  OR
 PROVIDING COMMERCIAL FINANCING.

 A. 10118                            3

   (I)  "PURCHASER" MEANS THE PERSON THAT INITIALLY ACQUIRES THE RIGHT TO
 RECEIVE PAYMENTS ON RECEIVABLES FROM THE SELLER IN AN  ACCOUNTS  RECEIV-
 ABLE  PURCHASE.  FOR PURPOSES OF THIS ARTICLE, A PURCHASER MAY ALSO BE A
 PROVIDER.
   (J) "RECIPIENT" MEANS A PERSON WHO IS PRESENTED AN OFFER OF COMMERCIAL
 FINANCING  BY A PROVIDER. A RECIPIENT MAY BE A BORROWER OR SELLER OR THE
 AUTHORIZED REPRESENTATIVE OF A BUYER OR SELLER.
   (K) "SALES-BASED FINANCING" MEANS A  TRANSACTION  WHERE  THERE  IS  AN
 EXTENSION OF FINANCING TO A RECIPIENT THAT IS REPAID BY THE RECIPIENT TO
 THE  PROVIDER,  OVER TIME, 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.
   (L) "SPECIFIC OFFER" MEANS THE SPECIFIC TERMS OF COMMERCIAL FINANCING,
 INCLUDING  PRICE  OR  AMOUNT,  THAT  IS  QUOTED TO A RECIPIENT, BASED ON
 INFORMATION OBTAINED FROM, OR ABOUT THE RECIPIENT, WHICH, IF ACCEPTED BY
 A RECIPIENT, SHALL BE BINDING ON THE PROVIDER, AS APPLICABLE, SUBJECT TO
 ANY SPECIFIC REQUIREMENTS STATED IN SUCH TERMS.
   § 702. EXEMPTIONS. THIS ARTICLE SHALL NOT  APPLY  TO,  AND  SHALL  NOT
 PLACE  ANY  ADDITIONAL  REQUIREMENTS  OR  OBLIGATIONS  UPON,  ANY OF THE
 FOLLOWING:
   (A) A FINANCIAL INSTITUTION;
   (B) A PERSON ACTING IN ITS CAPACITY AS A TECHNOLOGY SERVICES PROVIDER,
 SUCH AS LICENSING SOFTWARE AND PROVIDING SUPPORT SERVICES, TO AN  ENTITY
 EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE EXEMPT ENTITY'S COMMER-
 CIAL  FINANCING  PROGRAM,  PROVIDED  SUCH  PERSON  HAS  NO  INTEREST, OR
 ARRANGEMENT OR AGREEMENT TO PURCHASE  ANY  INTEREST  IN  THE  COMMERCIAL
 FINANCING EXTENDED BY THE EXEMPT ENTITY IN CONNECTION WITH SUCH PROGRAM;
   (C)  A  LENDER  REGULATED UNDER THE FEDERAL FARM CREDIT ACT (12 U.S.C.
 SEC. 2001 ET SEQ.);
   (D) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL PROPERTY;
   (E) A LEASE AS DEFINED IN SECTION 2-A-103 OF  THE  UNIFORM  COMMERCIAL
 CODE; OR
   (F) ANY PERSON OR PROVIDER WHO:
   (I)  MAKES NO MORE THAN FIVE COMMERCIAL FINANCING TRANSACTIONS IN THIS
 STATE IN A TWELVE-MONTH PERIOD;
   (II) MAKES COMMERCIAL FINANCING TRANSACTIONS IN THIS  STATE  THAT  ARE
 INCIDENTAL TO THE BUSINESS OF THE PERSON RELYING UPON THE EXEMPTION; OR
   (III) MAKES SPECIFIC OFFERS EXCLUSIVELY ON BEHALF OF PERSONS DESCRIBED
 IN PARAGRAPHS (I) AND (II) OF THIS SUBSECTION.
   §  703.  SALES-BASED  FINANCING  DISCLOSURE  REQUIREMENTS.  A PROVIDER
 SUBJECT TO THIS ARTICLE SHALL PROVIDE THE  FOLLOWING  DISCLOSURES  TO  A
 RECIPIENT  AT  THE  TIME  OF  EXTENDING  A SPECIFIC OFFER OF SALES-BASED
 FINANCING ACCORDING TO FORMATTING PRESCRIBED BY THE SUPERINTENDENT:
   (A) THE TOTAL AMOUNT OF THE COMMERCIAL FINANCING, AND THE DISBURSEMENT
 AMOUNT, IF DIFFERENT FROM THE FINANCING AMOUNT, AFTER ANY FEES  DEDUCTED
 OR WITHHELD AT DISBURSEMENT.
   (B)  THE  TOTAL  COST  OF  THE  FINANCING, EXPRESSED AS A DOLLAR COST,
 INCLUDING ANY AND ALL FEES, EXPENSES AND CHARGES THAT ARE TO BE PAID  BY
 THE RECIPIENT AND THAT CANNOT BE AVOIDED BY THE RECIPIENT.
   (C)  THE  ESTIMATED  ANNUAL  PERCENTAGE  RATE,  USING THE WORDS ANNUAL
 PERCENTAGE RATE OR THE ABBREVIATION "APR", EXPRESSED AS A  YEARLY  RATE,
 INCLUSIVE  OF ANY FEES AND FINANCE CHARGES, AND CALCULATED IN ACCORDANCE
 WITH THE FEDERAL TRUTH  IN  LENDING  ACT,  REGULATION  Z,  12  C.F.R.  §
 1026.22,  BASED  ON  THE  ESTIMATED  TERM OF REPAYMENT AND THE PROJECTED
 PERIODIC PAYMENT AMOUNTS.  THE  ESTIMATED  TERM  OF  REPAYMENT  AND  THE
 PROJECTED  PERIODIC  PAYMENT  AMOUNTS  SHALL  BE CALCULATED BASED ON THE

 A. 10118                            4
 
 PROJECTION OF THE RECIPIENT'S SALES, CALLED THE PROJECTED SALES  VOLUME.
 THE PROJECTED SALES VOLUME MAY BE CALCULATED USING THE HISTORICAL METHOD
 OR  THE  OPT-IN  METHOD. THE PROVIDER SHALL PROVIDE NOTICE TO THE SUPER-
 INTENDENT  ON  WHICH  METHOD THEY INTEND TO USE IN CALCULATING ESTIMATED
 ANNUAL PERCENTAGE RATE PURSUANT TO THIS SECTION.
   (I) THE PROVIDER USING THE HISTORICAL  METHOD  SHALL  USE  AN  AVERAGE
 HISTORICAL  VOLUME  OF SALES OR REVENUE BY WHICH THE FINANCING'S PAYMENT
 AMOUNTS ARE BASED AND THE ESTIMATED ANNUAL  PERCENTAGE  RATE  IS  CALCU-
 LATED.  THE PROVIDER SHALL FIX THE HISTORICAL TIME PERIOD USED TO CALCU-
 LATE THE AVERAGE HISTORICAL VOLUME AND USE SUCH PERIOD FOR  ALL  DISCLO-
 SURE  PURPOSES  FOR  ALL  SALES-BASED  FINANCING  PRODUCTS  OFFERED. THE
 AVERAGE HISTORICAL VOLUME SHALL BE NO LESS THAN ONE MONTH AND NOT EXCEED
 TWELVE MONTHS.
   (II) THE PROVIDER USING THE OPT-IN METHOD SHALL  DETERMINE  THE  ESTI-
 MATED  ANNUAL  PERCENTAGE  RATE,  THE  ESTIMATED TERM, AND THE PROJECTED
 PAYMENTS, USING A PROJECTED SALES VOLUME THAT THE  PROVIDER  ELECTS  FOR
 EACH  DISCLOSURE,  PROVIDED,  THAT  THEY PARTICIPATE IN A REVIEW PROCESS
 PRESCRIBED BY THE SUPERINTENDENT. A PROVIDER SHALL, ON AN ANNUAL  BASIS,
 DISCLOSE DATA TO THE SUPERINTENDENT OF ESTIMATED ANNUAL PERCENTAGE RATES
 DISCLOSED  TO  THE  RECIPIENT AND ACTUAL RETROSPECTIVE ANNUAL PERCENTAGE
 RATES OF COMPLETED TRANSACTIONS. THE REPORT SHALL CONTAIN SUCH  INFORMA-
 TION  AS  THE  SUPERINTENDENT,  BY  RULE OR REGULATION, MAY PRESCRIBE AS
 NECESSARY OR APPROPRIATE FOR THE PURPOSE OF MAKING  A  DETERMINATION  OF
 WHETHER  THE  DEVIATION BETWEEN THE ESTIMATED ANNUAL PERCENTAGE RATE AND
 ACTUAL RETROSPECTIVE ANNUAL PERCENTAGE RATES OF  COMPLETED  TRANSACTIONS
 WAS REASONABLE. THE SUPERINTENDENT SHALL ESTABLISH THE METHOD OF DISCLO-
 SURE  AND  MAY, UPON A FINDING THAT THE USE OF PROJECTED SALES VOLUME BY
 THE PROVIDER HAS RESULTED IN AN UNACCEPTABLE DEVIATION BETWEEN ESTIMATED
 AND ACTUAL ANNUAL PERCENTAGE RATE,  REQUIRE  THE  PROVIDER  TO  USE  THE
 HISTORICAL METHOD.
   (D)  THE TOTAL REPAYMENT AMOUNT, WHICH IS THE DISBURSEMENT AMOUNT PLUS
 THE TOTAL COST OF THE FINANCING.
   (E) THE ESTIMATED TERM IS THE PERIOD OF TIME REQUIRED FOR THE PERIODIC
 PAYMENTS, BASED ON THE PROJECTED SALES VOLUME, TO EQUAL THE TOTAL AMOUNT
 REQUIRED TO BE REPAID.
   (F) THE PAYMENT AMOUNTS, BASED ON THE PROJECTED SALES VOLUME:
   (I) FOR PAYMENT AMOUNTS  THAT  ARE  FIXED,  THE  PAYMENT  AMOUNTS  AND
 FREQUENCY  (E.G., DAILY, WEEKLY, MONTHLY), AND, IF THE PAYMENT FREQUENCY
 IS OTHER THAN MONTHLY, THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS  PER
 MONTH; OR
   (II)  FOR  PAYMENT  AMOUNTS THAT ARE VARIABLE, A PAYMENT SCHEDULE OR A
 DESCRIPTION OF THE METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF
 PAYMENTS, AND THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS PER MONTH.
   (G) A DESCRIPTION OF ALL OTHER POTENTIAL FEES AND CHARGES THAT CAN  BE
 AVOIDED BY THE RECIPIENT, INCLUDING, BUT NOT LIMITED TO, DRAW FEES, LATE
 PAYMENT FEES, AND RETURNED PAYMENT FEES.
   (H)  IN  THE EVENT THAT A RECIPIENT ELECTS TO PAY OFF OR REFINANCE THE
 COMMERCIAL  FINANCING  PRIOR  TO  FULL  REPAYMENT,  THE  PROVIDER   MUST
 DISCLOSE:
   (I) WHETHER THE RECIPIENT WOULD BE REQUIRED TO PAY ANY FINANCE CHARGES
 OTHER  THAN INTEREST ACCRUED SINCE THEIR LAST PAYMENT. IF SO, DISCLOSURE
 OF THE PERCENTAGE OF ANY UNPAID PORTION OF THE FINANCE CHARGE AND  MAXI-
 MUM DOLLAR AMOUNT THE RECIPIENT COULD BE REQUIRED TO PAY; AND
   (II)  WHETHER  THE  RECIPIENT  WOULD BE REQUIRED TO PAY ANY ADDITIONAL
 FEES NOT ALREADY INCLUDED IN THE FINANCE CHARGE.

 A. 10118                            5
 
   (I) A DESCRIPTION OF COLLATERAL REQUIREMENTS OR SECURITY INTERESTS, IF
 ANY.
   §  704.  CLOSED-END  COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.   A
 PROVIDER, SUBJECT TO THIS ARTICLE, SHALL PROVIDE THE  FOLLOWING  DISCLO-
 SURES  TO  A  RECIPIENT  AT  THE  TIME OF EXTENDING A SPECIFIC OFFER FOR
 CLOSED-END CREDIT ACCORDING TO FORMATTING PRESCRIBED BY THE  SUPERINTEN-
 DENT:
   (A) THE TOTAL AMOUNT OF THE COMMERCIAL FINANCING, AND THE DISBURSEMENT
 AMOUNT,  IF DIFFERENT FROM THE FINANCING AMOUNT, AFTER ANY FEES DEDUCTED
 OR WITHHELD AT DISBURSEMENT.
   (B) THE TOTAL COST OF THE  FINANCING,  EXPRESSED  AS  A  DOLLAR  COST,
 INCLUDING  ANY AND ALL FEES, EXPENSES AND CHARGES THAT ARE TO BE PAID BY
 THE RECIPIENT AND THAT CANNOT BE AVOIDED BY  THE  RECIPIENT.  THE  TOTAL
 COST  OF FINANCING SHALL ASSUME THE RECIPIENT REPAYS THE TOTAL REPAYMENT
 AMOUNT, ACCORDING TO THE ORIGINAL AGREED UPON PAYMENT SCHEDULE.
   (C) THE ANNUAL PERCENTAGE RATE, USING ONLY THE WORDS ANNUAL PERCENTAGE
 RATE OR THE ABBREVIATION "APR", EXPRESSED AS A YEARLY RATE, INCLUSIVE OF
 ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECIPIENT,  AND
 CALCULATED  IN  ACCORDANCE  WITH THE FEDERAL TRUTH IN LENDING ACT, REGU-
 LATION Z, 12 C.F.R. § 1026.22.
   (D) THE TOTAL REPAYMENT AMOUNT, WHICH IS THE DISBURSEMENT AMOUNT  PLUS
 THE TOTAL COST OF THE FINANCING.
   (E) THE TERM OF THE FINANCING.
   (F) THE PAYMENT AMOUNTS:
   (I)  FOR  PAYMENT  AMOUNTS  THAT  ARE  FIXED,  THE PAYMENT AMOUNTS AND
 FREQUENCY (E.G., DAILY, WEEKLY, MONTHLY), AND, IF  THE  TERM  IS  LONGER
 THAN ONE MONTH, THE AVERAGE MONTHLY PAYMENT AMOUNT; OR
   (II) FOR PAYMENT AMOUNTS THAT ARE VARIABLE, A FULL PAYMENT SCHEDULE OR
 A  DESCRIPTION OF THE METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY
 OF PAYMENTS, AND, IF THE TERM IS LONGER THAN ONE  MONTH,  THE  ESTIMATED
 AVERAGE MONTHLY PAYMENT AMOUNT.
   (G)  A DESCRIPTION OF ALL OTHER POTENTIAL FEES AND CHARGES THAT CAN BE
 AVOIDED BY THE RECIPIENT, INCLUDING, BUT NOT LIMITED  TO,  LATE  PAYMENT
 FEES AND RETURNED PAYMENT FEES.
   (H)  IN  THE EVENT THAT A RECIPIENT ELECTS TO PAY OFF OR REFINANCE THE
 COMMERCIAL  FINANCING  PRIOR  TO  FULL  REPAYMENT,  THE  PROVIDER   MUST
 DISCLOSE:
   (I) WHETHER THE RECIPIENT WOULD BE REQUIRED TO PAY ANY FINANCE CHARGES
 OTHER  THAN INTEREST ACCRUED SINCE THEIR LAST PAYMENT. IF SO, DISCLOSURE
 OF THE PERCENTAGE OF ANY UNPAID PORTION OF THE FINANCE CHARGE AND  MAXI-
 MUM DOLLAR AMOUNT THE RECIPIENT COULD BE REQUIRED TO PAY; AND
   (II)  WHETHER  THE  RECIPIENT  WOULD BE REQUIRED TO PAY ANY ADDITIONAL
 FEES NOT ALREADY INCLUDED IN THE FINANCE CHARGE.
   (I) A DESCRIPTION OF COLLATERAL REQUIREMENTS OR SECURITY INTERESTS, IF
 ANY.
   §  705.  OPEN-END  COMMERCIAL  FINANCING  DISCLOSURE  REQUIREMENTS.  A
 PROVIDER,  SUBJECT  TO THIS ARTICLE, SHALL PROVIDE THE FOLLOWING DISCLO-
 SURES TO A RECIPIENT AT THE TIME OF EXTENDING A  SPECIFIC  OFFER  FOR  A
 COMMERCIAL  LINE  OF  CREDIT  ACCORDING  TO FORMATTING PRESCRIBED BY THE
 SUPERINTENDENT:
   (A) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE RECIPIENT (E.G., THE
 CREDIT LINE AMOUNT), AND THE AMOUNT SCHEDULED TO BE DRAWN BY THE RECIPI-
 ENT AT THE TIME THE OFFER IS EXTENDED, IF ANY, LESS ANY FEES DEDUCTED OR
 WITHHELD AT DISBURSEMENT.
   (B) THE TOTAL COST OF THE  FINANCING,  EXPRESSED  AS  A  DOLLAR  COST,
 INCLUDING  ALL  REQUIRED PERIODIC AND NON-PERIODIC FEES AND CHARGES THAT

 A. 10118                            6
 
 CANNOT BE AVOIDED BY THE RECIPIENT, INCLUDING ANY INTEREST EXPENSE.  THE
 TOTAL COST OF FINANCING SHALL ASSUME THE MAXIMUM AMOUNT OF CREDIT AVAIL-
 ABLE  TO THE RECIPIENT, IN EACH CASE, IS DRAWN AND HELD FOR THE DURATION
 OF THE TERM OR DRAW PERIOD.
   (C) THE ANNUAL PERCENTAGE RATE, USING ONLY THE WORDS ANNUAL PERCENTAGE
 RATE  OR  THE  ABBREVIATION  "APR",  EXPRESSED AS A NOMINAL YEARLY RATE,
 INCLUSIVE OF ANY FEES AND FINANCE CHARGES THAT CANNOT BE  AVOIDED  BY  A
 RECIPIENT,  AND CALCULATED IN ACCORDANCE WITH THE FEDERAL TRUTH IN LEND-
 ING ACT, REGULATION Z, 12 C.F.R. § 1026.22  AND  BASED  ON  THE  MAXIMUM
 AMOUNT  OF CREDIT AVAILABLE TO THE RECIPIENT AND THE TERM RESULTING FROM
 MAKING THE MINIMUM REQUIRED PAYMENTS TERM AS DISCLOSED.
   (D) THE TOTAL REPAYMENT AMOUNT, WHICH IS THE  DRAW  AMOUNT,  LESS  ANY
 FEES  DEDUCTED  OR  WITHHELD AT DISBURSEMENT, PLUS THE TOTAL COST OF THE
 FINANCING.  THE TOTAL REPAYMENT AMOUNT SHALL ASSUME A DRAW AMOUNT  EQUAL
 TO  THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE RECIPIENT IF DRAWN AND
 HELD FOR THE DURATION OF THE TERM OR DRAW PERIOD.
   (E) THE TERM OF THE PLAN, IF APPLICABLE, OR THE PERIOD  OVER  WHICH  A
 DRAW IS AMORTIZED.
   (F)  THE  PAYMENT FREQUENCY AND AMOUNTS, BASED ON THE ASSUMPTIONS USED
 IN  THE  CALCULATION  OF  THE  ANNUAL  PERCENTAGE  RATE,   INCLUDING   A
 DESCRIPTION  OF  PAYMENT  AMOUNT  REQUIREMENTS SUCH AS A MINIMUM PAYMENT
 AMOUNT, AND IF THE PAYMENT FREQUENCY IS OTHER THAN MONTHLY,  THE  AMOUNT
 OF  THE  AVERAGE PROJECTED PAYMENTS PER MONTH.  FOR PAYMENT AMOUNTS THAT
 ARE VARIABLE, THE PROVIDER SHOULD  INCLUDE  A  PAYMENT  SCHEDULE,  OR  A
 DESCRIPTION OF THE METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF
 PAYMENTS, AND THE ESTIMATED AVERAGE MONTHLY PAYMENT AMOUNT.
   (G)  A DESCRIPTION OF ALL OTHER POTENTIAL FEES AND CHARGES THAT CAN BE
 AVOIDED BY THE RECIPIENT, INCLUDING, BUT NOT LIMITED TO, DRAW FEES, LATE
 PAYMENT FEES, AND RETURNED PAYMENT FEES.
   (H) IN THE EVENT THAT A RECIPIENT ELECTS TO PAY OFF OR  REFINANCE  THE
 COMMERCIAL   FINANCING  PRIOR  TO  FULL  REPAYMENT,  THE  PROVIDER  MUST
 DISCLOSE:
   (I) WHETHER THE RECIPIENT WOULD BE REQUIRED TO PAY ANY FINANCE CHARGES
 OTHER THAN INTEREST ACCRUED SINCE THEIR LAST PAYMENT. IF SO,  DISCLOSURE
 OF  THE PERCENTAGE OF ANY UNPAID PORTION OF THE FINANCE CHARGE AND MAXI-
 MUM DOLLAR AMOUNT THE RECIPIENT COULD BE REQUIRED TO PAY; AND
   (II) WHETHER THE RECIPIENT WOULD BE REQUIRED  TO  PAY  ANY  ADDITIONAL
 FEES NOT ALREADY INCLUDED IN THE FINANCE CHARGE.
   (I) A DESCRIPTION OF COLLATERAL REQUIREMENTS OR SECURITY INTERESTS, IF
 ANY.
   §  706.  ACCOUNTS  RECEIVABLE TRANSACTION DISCLOSURE REQUIREMENTS.   A
 PROVIDER, SUBJECT TO THIS ARTICLE, SHALL PROVIDE THE  FOLLOWING  DISCLO-
 SURES  TO  A  RECIPIENT AT THE TIME OF EXTENDING A SPECIFIC OFFER FOR AN
 ACCOUNTS RECEIVABLE TRANSACTION ACCORDING TO  FORMATTING  PRESCRIBED  BY
 THE SUPERINTENDENT:
   (A) THE AMOUNT OF THE RECEIVABLES PURCHASE PRICE PAID TO THE RECIPIENT
 AND,  IF  DIFFERENT FROM THE PURCHASE PRICE, THE AMOUNT DISBURSED TO THE
 RECIPIENT AFTER ANY FEES DEDUCTED OR WITHHELD AT DISBURSEMENT.
   (B) THE TOTAL COST OF FINANCING, EXPRESSED AS A DOLLAR COST, WHICH  IS
 THE  DIFFERENCE  BETWEEN  THE VALUE OF THE PURCHASED RECEIVABLES AND THE
 PURCHASE PRICE PAID TO THE RECIPIENT.
   (C) THE ESTIMATED ANNUAL PERCENTAGE RATE, USING THAT TERM,  CALCULATED
 ACCORDING TO THE FEDERAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. §
 1026  APPENDIX  J, AS A "SINGLE ADVANCE, SINGLE PAYMENT TRANSACTION". TO
 CALCULATE THE ESTIMATED ANNUAL PERCENTAGE RATE, THE PURCHASE  AMOUNT  IS
 CONSIDERED  THE  FINANCING  AMOUNT,  THE PURCHASE AMOUNT MINUS THE TOTAL

 A. 10118                            7
 
 COST OF FINANCING IS CONSIDERED THE PAYMENT  AMOUNT,  AND  THE  TERM  IS
 ESTABLISHED  BY THE PAYMENT DUE DATE OF THE RECEIVABLES. AS AN ALTERNATE
 METHOD OF ESTABLISHING THE TERM, THE PROVIDER MAY ESTIMATE THE TERM  FOR
 AN  ACCOUNT  RECEIVABLE  TRANSACTION  AS THE AVERAGE PAYMENT PERIOD, ITS
 HISTORICAL DATA OVER A PERIOD NOT TO EXCEED THE PREVIOUS TWELVE  MONTHS,
 CONCERNING PAYMENT INVOICES PAID BY THE PARTY OWING THE ACCOUNTS RECEIV-
 ABLE IN QUESTION.
   (D)  THE TOTAL REPAYMENT AMOUNT, WHICH IS THE PURCHASE AMOUNT PLUS THE
 TOTAL COST OF THE FINANCING.
   (E) A DESCRIPTION OF ALL OTHER POTENTIAL FEES AND CHARGES THAT CAN  BE
 AVOIDED BY THE RECIPIENT.
   (F)  A  DESCRIPTION  OF  THE  RECEIVABLES PURCHASED AND ANY ADDITIONAL
 COLLATERAL REQUIREMENTS OR SECURITY INTERESTS.
   § 707. OTHER FORMS OF FINANCING DISCLOSURE  REQUIREMENTS.  THE  SUPER-
 INTENDENT  MAY  REQUIRE  DISCLOSURE  BY  A PROVIDER EXTENDING A SPECIFIC
 OFFER OF COMMERCIAL FINANCING WHICH IS NOT A COMMERCIAL LINE OF  CREDIT,
 CLOSED-END  CREDIT, SALES-BASED FINANCING, OR ACCOUNTS RECEIVABLE TRANS-
 ACTION BUT OTHERWISE MEETS THE DEFINITION  OF  COMMERCIAL  FINANCING  AS
 PROVIDED  IN  THIS ARTICLE. SUBJECT TO SUCH RULES AND REGULATIONS BY THE
 SUPERINTENDENT, A PROVIDER SUBJECT TO THIS  ARTICLE  SHALL  PROVIDE  THE
 FOLLOWING DISCLOSURES TO A RECIPIENT AT THE TIME OF EXTENDING A SPECIFIC
 OFFER  OF OTHER FORMS OF FINANCING ACCORDING TO FORMATTING PRESCRIBED BY
 THE SUPERINTENDENT:
   (A) THE TOTAL AMOUNT OF THE COMMERCIAL FINANCING, AND THE DISBURSEMENT
 AMOUNT, IF DIFFERENT FROM THE FINANCING AMOUNT, AFTER ANY FEES  DEDUCTED
 OR WITHHELD AT DISBURSEMENT.
   (B)  THE  TOTAL  COST  OF  THE  FINANCING, EXPRESSED AS A DOLLAR COST,
 INCLUDING ANY AND ALL FEES, EXPENSES AND CHARGES THAT ARE TO BE PAID  BY
 THE RECIPIENT AND THAT CANNOT BE AVOIDED BY THE RECIPIENT, INCLUDING ANY
 INTEREST EXPENSE. THE TOTAL COST OF FINANCING SHALL ASSUME THE RECIPIENT
 REPAYS  THE COMMERCIAL FINANCING IN ITS ENTIRETY ACCORDING TO THE AGREED
 UPON ORIGINAL PAYMENT SCHEDULE.
   (C) THE ANNUAL PERCENTAGE RATE, USING ONLY THE WORDS ANNUAL PERCENTAGE
 RATE OR THE ABBREVIATION "APR", EXPRESSED AS A YEARLY RATE, INCLUSIVE OF
 ANY FEES AND FINANCE CHARGES, AND  CALCULATED  IN  ACCORDANCE  WITH  THE
 RELEVANT  SECTIONS  OF THE FEDERAL TRUTH IN LENDING ACT, REGULATION Z OR
 THIS ARTICLE.
   (D) THE TOTAL REPAYMENT AMOUNT, WHICH IS THE DISBURSEMENT AMOUNT  PLUS
 THE TOTAL COST OF THE FINANCING.
   (E) THE TERM OF THE FINANCING.
   (F) THE PAYMENT AMOUNTS:
   (I)  FOR  PAYMENT  AMOUNTS  THAT  ARE  FIXED,  THE PAYMENT AMOUNTS AND
 FREQUENCY (E.G.,  DAILY,  WEEKLY,  MONTHLY),  AND  THE  AVERAGE  MONTHLY
 PAYMENT AMOUNT; OR
   (II)  FOR  PAYMENT  AMOUNTS THAT ARE VARIABLE, A PAYMENT SCHEDULE OR A
 DESCRIPTION OF THE METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF
 PAYMENTS, AND THE ESTIMATED AVERAGE MONTHLY PAYMENT AMOUNT.
   (G) A DESCRIPTION OF ALL OTHER POTENTIAL FEES AND CHARGES THAT CAN  BE
 AVOIDED  BY  THE  RECIPIENT, INCLUDING, BUT NOT LIMITED TO, LATE PAYMENT
 FEES AND RETURNED PAYMENT FEES.
   (H) IN THE EVENT THAT A RECIPIENT ELECTS TO PAY OFF OR  REFINANCE  THE
 COMMERCIAL   FINANCING  PRIOR  TO  FULL  REPAYMENT,  THE  PROVIDER  MUST
 DISCLOSE:
   (I) WHETHER THE RECIPIENT WOULD BE REQUIRED TO PAY ANY FINANCE CHARGES
 OTHER THAN INTEREST ACCRUED SINCE THEIR LAST PAYMENT. IF SO,  DISCLOSURE

 A. 10118                            8
 
 OF  THE PERCENTAGE OF ANY UNPAID PORTION OF THE FINANCE CHARGE AND MAXI-
 MUM DOLLAR AMOUNT THE RECIPIENT COULD BE REQUIRED TO PAY; AND
   (II)  WHETHER  THE  RECIPIENT  WOULD BE REQUIRED TO PAY ANY ADDITIONAL
 FEES NOT ALREADY INCLUDED IN THE FINANCE CHARGE.
   (I) A DESCRIPTION OF COLLATERAL REQUIREMENTS OR SECURITY INTERESTS, IF
 ANY.
   § 708. DISCLOSURE REQUIREMENTS FOR RENEWAL FINANCING. IF, AS A  CONDI-
 TION  OF  OBTAINING  THE COMMERCIAL FINANCING, THE PROVIDER REQUIRES THE
 RECIPIENT TO PAY OFF THE BALANCE OF  AN  EXISTING  COMMERCIAL  FINANCING
 FROM THE SAME PROVIDER, THE PROVIDER MUST DISCLOSE:
   (A) THE AMOUNT OF THE NEW COMMERCIAL FINANCING THAT IS USED TO PAY OFF
 THE  PORTION  OF  THE  EXISTING  COMMERCIAL  FINANCING  THAT CONSISTS OF
 PREPAYMENT CHARGES REQUIRED TO BE PAID AND ANY UNPAID  INTEREST  EXPENSE
 THAT  WAS  NOT  FORGIVEN AT THE TIME OF RENEWAL. FOR FINANCING FOR WHICH
 THE TOTAL REPAYMENT AMOUNT IS CALCULATED AS A FIXED AMOUNT, THE  PREPAY-
 MENT  CHARGE  IS  EQUAL TO THE ORIGINAL FINANCE CHARGE MULTIPLIED BY THE
 AMOUNT OF THE RENEWAL USED TO PAY OFF EXISTING FINANCING AS A PERCENTAGE
 OF THE TOTAL REPAYMENT AMOUNT, MINUS ANY PORTION OF THE TOTAL  REPAYMENT
 AMOUNT FORGIVEN BY THE PROVIDER AT THE TIME OF PREPAYMENT. IF THE AMOUNT
 IS  MORE  THAN  ZERO,  SUCH  AMOUNT SHALL BE THE ANSWER TO THE FOLLOWING
 QUESTION:
   "DOES THE RENEWAL FINANCING INCLUDE ANY AMOUNT THAT  IS  USED  TO  PAY
 UNPAID FINANCE CHARGE OR FEES, ALSO KNOWN AS DOUBLE DIPPING? YES, {ENTER
 AMOUNT}. IF THE AMOUNT IS ZERO, THE ANSWER WOULD BE NO."
   (B)  IF THE DISBURSEMENT AMOUNT WILL BE REDUCED TO PAY DOWN ANY UNPAID
 PORTION OF THE OUTSTANDING BALANCE, THE ACTUAL DOLLAR  AMOUNT  BY  WHICH
 SUCH DISBURSEMENT AMOUNT WILL BE REDUCED.
   §  709.  REQUIRED SIGNATURE. THE PROVIDER SHALL OBTAIN THE RECIPIENT'S
 SIGNATURE, WHICH MAY BE FULFILLED BY AN  ELECTRONIC  SIGNATURE,  ON  ALL
 DISCLOSURES  REQUIRED  TO  BE PRESENTED TO THE RECIPIENT BY THIS ARTICLE
 BEFORE AUTHORIZING THE RECIPIENT TO PROCEED FURTHER WITH THE  COMMERCIAL
 FINANCING TRANSACTION APPLICATION.
   § 710. ADDITIONAL INFORMATION. NOTHING IN THIS ARTICLE SHALL PREVENT A
 PROVIDER  FROM  PROVIDING  OR  DISCLOSING  ADDITIONAL  INFORMATION  ON A
 COMMERCIAL FINANCING BEING OFFERED TO  A  RECIPIENT,  PROVIDED  HOWEVER,
 THAT  SUCH  ADDITIONAL INFORMATION SHALL NOT BE DISCLOSED AS PART OF THE
 DISCLOSURE REQUIRED BY THIS ARTICLE. IF OTHER METRICS OF FINANCING  COST
 ARE DISCLOSED OR USED IN THE APPLICATION PROCESS OF A COMMERCIAL FINANC-
 ING,  THESE  METRICS  SHALL NOT BE PRESENTED AS A "RATE" IF THEY ARE NOT
 THE ANNUAL INTEREST RATE OR THE ANNUAL PERCENTAGE RATE. THE TERM "INTER-
 EST", WHEN USED TO DESCRIBE A PERCENTAGE RATE, SHALL  ONLY  BE  USED  TO
 DESCRIBE  ANNUALIZED PERCENTAGE RATES, SUCH AS THE ANNUAL INTEREST RATE.
 WHEN A PROVIDER STATES A RATE OF FINANCE CHARGE OR A FINANCING AMOUNT TO
 A RECIPIENT DURING AN APPLICATION PROCESS FOR COMMERCIAL FINANCING,  THE
 PROVIDER SHALL ALSO STATE THE RATE AS AN "ANNUAL PERCENTAGE RATE", USING
 THAT TERM OR THE ABBREVIATION "APR".
   §  711. RULES AND REGULATIONS. THE SUPERINTENDENT IS HEREBY AUTHORIZED
 AND EMPOWERED TO PROMULGATE SUCH RULES AND REGULATIONS  AS  MAY  IN  THE
 JUDGMENT  OF  THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF THIS
 ARTICLE, OR APPROPRIATE FOR THE EFFECTIVE ADMINISTRATION OF  THIS  ARTI-
 CLE, INCLUDING, BUT NOT LIMITED TO:
   (A)  SUCH  RULES AND REGULATIONS IN CONNECTION WITH THE CALCULATION OR
 DETERMINATION OF ANY METRIC REQUIRED TO BE DISCLOSED TO A RECIPIENT.
   (B) SUCH RULES AND REGULATIONS AS NECESSARY TO DEVELOP  AND  PRESCRIBE
 DISCLOSURE FORMATTING TO BE USED BY PROVIDERS THAT ALLOWS FOR RECIPIENTS
 TO  EASILY  COMPARE FINANCING OPTIONS IN A CLEAR AND CONSPICUOUS MANNER.

 A. 10118                            9
 
 SUCH RULES AND REGULATIONS SHALL INCLUDE THE DESIGNATION AND METHOD  FOR
 DISCLOSING  THE  INFORMATION  REQUIRED  IN  THIS  ARTICLE,  OR APPROVING
 ADEQUATE FORMS AND METHODS ALREADY USED BY PROVIDERS.
   (C)  SUCH  RULES  AND REGULATIONS AS MAY DEFINE THE TERMS USED IN THIS
 ARTICLE AND AS MAY BE NECESSARY AND APPROPRIATE TO INTERPRET AND  IMPLE-
 MENT THE PROVISIONS OF THIS ARTICLE.
   (D) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT
 OF THIS ARTICLE.
   §  712.  PENALTIES.  (A)  UPON  A FINDING BY THE SUPERINTENDENT THAT A
 PROVIDER HAS VIOLATED THE PROVISIONS OF THIS ARTICLE  OR  THE  RULES  OR
 REGULATIONS  PROMULGATED HEREUNDER, THE PROVIDER SHALL BE ORDERED TO PAY
 TO THE PEOPLE OF THIS STATE A CIVIL PENALTY FOR EACH VIOLATION  OF  THIS
 ARTICLE  OR  ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM NOT TO
 EXCEED TWO THOUSAND DOLLARS FOR EACH VIOLATION OR WHERE  SUCH  VIOLATION
 IS WILLFUL TEN THOUSAND DOLLARS FOR EACH VIOLATION.
   (B)  IN  ADDITION TO ANY PENALTY IMPOSED PURSUANT TO SUBSECTION (A) OF
 THIS SECTION, UPON A FINDING BY THE SUPERINTENDENT THAT A  PROVIDER  HAS
 KNOWINGLY VIOLATED THIS ARTICLE, THE SUPERINTENDENT MAY ORDER ADDITIONAL
 RELIEF,  INCLUDING,  BUT  NOT  LIMITED  TO,  A  PERMANENT OR PRELIMINARY
 INJUNCTION ON BEHALF OF ANY RECIPIENT AFFECTED BY THE VIOLATION.
   § 2. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.