S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5470
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                May 1, 2019
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT to amend the financial services law, in  relation  to  commercial
   financing disclosures
 
   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. PURCHASE AND SALE DISCLOSURE REQUIREMENTS.
         704. CLOSED-END COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.
         705. OPEN-END COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.
         706. ADDITIONAL INFORMATION.
         707. ESTIMATES.
         708. PENALTIES.
   § 701. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
   (A) "ACCOUNTS RECEIVABLE PURCHASE" MEANS A PURCHASE  AND  SALE  TRANS-
 ACTION  IN  WHICH  ONE  OR  MORE DESIGNATED ACCOUNTS ARE ASSIGNED TO THE
 PURCHASER BY THE SELLER AT A SPECIFIED DISCOUNT RATE.  FOR  PURPOSES  OF
 THIS  ARTICLE, "ACCOUNT" SHALL HAVE THE MEANING ASSIGNED TO THAT TERM IN
 PARAGRAPH TWO OF SUBSECTION (A) OF SECTION 9-102 OF THE UNIFORM  COMMER-
 CIAL  CODE. AN ACCOUNTS RECEIVABLE PURCHASE INCLUDES, BUT IS NOT LIMITED
 TO, A FACTORING TRANSACTION.
   (B) "COMMERCIAL FINANCING"  MEANS  AN  ACCOUNTS  RECEIVABLE  PURCHASE,
 FUTURE  RECEIVABLES  PURCHASE,  COMMERCIAL  LINE OF CREDIT OR COMMERCIAL
 LOAN, THE PROCEEDS OF WHICH THE RECIPIENT DOES NOT INTEND TO USE  PRIMA-
 RILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES.  FOR PURPOSES OF DETER-
 MINING  WHETHER  A FINANCING IS A COMMERCIAL FINANCING, THE PROVIDER MAY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11387-01-9

 S. 5470                             2
 
 RELY ON ANY STATEMENT OF INTENDED PURPOSES BY THE RECIPIENT. THE  STATE-
 MENT  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 STATEMENT 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 REASONABLY
 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) "COMMERCIAL LOAN" MEANS A CLOSED-END EXTENSION OF CREDIT,  SECURED
 OR UNSECURED, THE PROCEEDS OF WHICH THE RECIPIENT DOES NOT INTEND TO USE
 PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES.
   (E)  "CREDITOR"  MEANS  THE  PERSON  TO WHICH THE FINANCING OBLIGATION
 UNDER A COMMERCIAL LINE OF CREDIT OR COMMERCIAL LOAN 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)  "FUTURE  RECEIVABLES  PURCHASE"  MEANS A PURCHASE AND SALE TRANS-
 ACTION IN WHICH THE PURCHASER ACQUIRES THE RIGHT TO  RECEIVE  ALL  OR  A
 PORTION OF FUTURE ACCOUNTS GENERATED BY A SELLER AT A SPECIFIED DISCOUNT
 RATE.  FOR  PURPOSES  OF  THIS ARTICLE, "ACCOUNT" SHALL HAVE THE MEANING
 ASSIGNED TO THAT TERM IN PARAGRAPH TWO  OF  SUBSECTION  (A)  OF  SECTION
 9-102  OF  THE  UNIFORM  COMMERCIAL  CODE. A FUTURE RECEIVABLES PURCHASE
 INCLUDES, BUT IS NOT LIMITED TO, A MERCHANT CASH ADVANCE TRANSACTION.
   (H)"OFFER" MEANS THE SPECIFIC TERMS OF A COMMERCIAL  FINANCING  AGREE-
 MENT WHICH, IF ACCEPTED BY A RECIPIENT, SHALL BE BINDING ON THE CREDITOR
 OR PURCHASER, AS APPLICABLE, SUBJECT TO ANY SPECIFIC REQUIREMENTS STATED
 IN SUCH TERMS.
   (I)  "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.
   (J) "PROVIDER" MEANS A PERSON  WHO  EXTENDS  AN  OFFER  OF  COMMERCIAL
 FINANCING  TO A RECIPIENT. A PROVIDER MAY INCLUDE A CREDITOR OR PURCHAS-
 ER. UNLESS OTHERWISE EXEMPT, "PROVIDER" ALSO INCLUDES A PERSON  THAT  IS
 NOT  A  CREDITOR  OR  PURCHASER  BUT  WHO SOLICITS AND OFFERS COMMERCIAL
 FINANCING ON BEHALF OF A THIRD PARTY. FOR THE AVOIDANCE  OF  DOUBT,  THE

 S. 5470                             3
 
 EXTENSION  OF AN OFFER OR PROVIDING DISCLOSURES FOR A COMMERCIAL FINANC-
 ING, IN AND OF ITSELF, SHALL NOT BE CONSTRUED TO MEAN THAT A PROVIDER IS
 ORIGINATING, MAKING, FUNDING OR PROVIDING COMMERCIAL FINANCING.
   (K)  "PURCHASER" MEANS THE PERSON THAT INITIALLY ACQUIRES THE RIGHT TO
 RECEIVE PAYMENTS ON CURRENT OR FUTURE RECEIVABLES FROM THE SELLER IN  AN
 ACCOUNTS RECEIVABLE PURCHASE OR FUTURE RECEIVABLES PURCHASE TRANSACTION.
 FOR PURPOSES OF THIS ACT, A PURCHASER MAY ALSO BE A PROVIDER.
   (L) "RECIPIENT" MEANS A PERSON WHO IS PRESENTED AN OFFER OF COMMERCIAL
 FINANCING  BY  A PROVIDER.   A RECIPIENT MAY BE A BORROWER OR SELLER (OR
 ITS AUTHORIZED REPRESENTATIVE).
   § 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;
   (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; OR
   (E) ANY PERSON WHO MAKES NO MORE THAN ONE COMMERCIAL FINANCING  TRANS-
 ACTION  IN  THIS STATE IN A TWELVE-MONTH PERIOD; OR ANY PERSON WHO MAKES
 COMMERCIAL FINANCING TRANSACTIONS IN THIS STATE THAT ARE  INCIDENTAL  TO
 THE BUSINESS OF THE PERSON RELYING UPON THE EXEMPTION.
   §  703.  PURCHASE AND SALE DISCLOSURE REQUIREMENTS. A PROVIDER SUBJECT
 TO THIS ARTICLE SHALL PROVIDE THE FOLLOWING DISCLOSURES TO  A  RECIPIENT
 AT  THE TIME OF EXTENDING AN OFFER IN AN ACCOUNTS RECEIVABLE PURCHASE OR
 FUTURE RECEIVABLES PURCHASE TRANSACTION:
   (A) THE PURCHASE PRICE;
   (B) THE DISBURSEMENT AMOUNT, AFTER ANY FEES DEDUCTED  OR  WITHHELD  AT
 DISBURSEMENT;
   (C)  THE  TOTAL AMOUNT OF CURRENT OR FUTURE RECEIVABLES SOLD, WHICH IS
 THE DISBURSEMENT AMOUNT PLUS THE TOTAL COST OF THE FINANCING;
   (D) 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;
   (E) THE ESTIMATED ANNUAL PERCENTAGE RATE:
   (I) WHEN CALCULATING REPAYMENT  COSTS  DEPENDENT  ON  THE  RECIPIENT'S
 RECEIVABLES,  WHETHER  CURRENTLY OWED OR PROJECTED, THE ESTIMATED ANNUAL
 PERCENTAGE RATE, CALCULATED WITH ALL FEES AND CHARGES INCLUDED, PROVIDED
 AS A RANGE, WITH AT LEAST THREE DIFFERENT REPAYMENT TIMES PROVIDED AND A
 NARRATIVE EXPLANATION OF HOW EACH RATE WAS DERIVED. ANY ESTIMATED ANNUAL
 PERCENTAGE RATE PROVIDED PURSUANT TO  THIS  SUBPARAGRAPH  SHALL  BE  (A)
 CALCULATED  USING  THE  VALUE  OF  PURCHASED  ACCOUNTS RECEIVABLE OR THE
 PROJECTED VOLUME OF FUTURE RECEIVABLES BASED ON THE RECIPIENT'S  AVERAGE
 HISTORICAL  SALES, OR THE SALES PROJECTIONS RELIED ON BY THE PROVIDER IN
 UNDERWRITING; AND (B) ACCOMPANIED BY A DISCLOSURE STATING THAT THE ESTI-
 MATED ANNUAL PERCENTAGE RATE IS INTENDED AS A GOOD FAITH  ESTIMATE,  AND
 MAY  NOT BE ACCURATE IF THE RECIPIENT REPAYS MORE QUICKLY OR SLOWLY THAN
 THE ESTIMATED TERM; OR
   (II) WHEN CALCULATING REPAYMENT COSTS AS A FIXED PAYMENT,  THE  ANNUAL
 PERCENTAGE  RATE,  EXPRESSED  AS A NOMINAL 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;

 S. 5470                             4
 
   (F) THE FACTOR RATE, EXPRESSED AS A DECIMAL, AND THE FACTORING COMMIS-
 SION  RATE,  EXPRESSED AS A PERCENTAGE OF SALES OR CLAIMS, INCLUDING ANY
 MINIMUM OR MAXIMUM PAYMENT AMOUNTS;
   (G) THE TERM OR THE ESTIMATED TERM OF THE FINANCING. AN ESTIMATED TERM
 PROVIDED  PURSUANT TO THIS SUBSECTION SHALL BE THE TERM RELIED ON BY THE
 PROVIDER IN UNDERWRITING;
   (H) 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;
   (I)  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;
   (J) PREPAYMENT CHARGES, OR A DESCRIPTION  OF  ANY  FEES,  EXPENSES  OR
 CHARGES DUE WHEN PURCHASE PRICE IS PAID IN FULL; AND
   (K) A DESCRIPTION OF THE CURRENT OR FUTURE RECEIVABLES PURCHASED.
   §  704.  CLOSED-END  COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS.   A
 PROVIDER SUBJECT TO THIS ARTICLE SHALL PROVIDE THE FOLLOWING DISCLOSURES
 TO A RECIPIENT AT THE TIME OF EXTENDING AN OFFER OF A COMMERCIAL LOAN:
   (A) THE AMOUNT FINANCED (E.G., THE PRINCIPAL AMOUNT);
   (B) THE DISBURSEMENT AMOUNT, AFTER ANY FEES DEDUCTED  OR  WITHHELD  AT
 DISBURSEMENT;
   (C)  THE TOTAL REPAYMENT AMOUNT, WHICH IS THE DISBURSEMENT AMOUNT PLUS
 THE TOTAL COST OF THE FINANCING;
   (D) 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;
   (E)  THE  ANNUAL  PERCENTAGE RATE, EXPRESSED AS A NOMINAL 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;
   (F) THE TERM OF THE FINANCING;
   (G) 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;
   (H)  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;
   (I)  PREPAYMENT  CHARGES,  OR  A  DESCRIPTION OF ANY FEES, EXPENSES OR
 CHARGES DUE WHEN THE FINANCING AMOUNT IS PAID IN FULL; AND
   (J) A DESCRIPTION OF ANY COLLATERAL REQUIREMENTS  OR  SECURITY  INTER-
 ESTS.
   §  705.  OPEN-END  COMMERCIAL  FINANCING  DISCLOSURE  REQUIREMENTS.  A
 PROVIDER SUBJECT TO THIS ARTICLE SHALL PROVIDE THE FOLLOWING DISCLOSURES
 TO A RECIPIENT AT THE TIME OF EXTENDING AN OFFER OF A COMMERCIAL LINE OF
 CREDIT:

 S. 5470                             5
 
   (A) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE RECIPIENT (E.G., THE
 CREDIT LINE AMOUNT);
   (B)  THE AMOUNT SCHEDULED TO BE DRAWN BY THE RECIPIENT AT THE TIME THE
 OFFER IS EXTENDED, IF  ANY,  LESS  ANY  FEES  DEDUCTED  OR  WITHHELD  AT
 DISBURSEMENT;
   (C)  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 THE AMOUNT SCHEDULED
 TO BE DRAWN BY THE RECIPIENT AT THE TIME THE OFFER IS EXTENDED, OR IF NO
 AMOUNT IS SCHEDULED TO BE DRAWN AT SUCH  TIME,  THE  MAXIMUM  AMOUNT  OF
 CREDIT  AVAILABLE  TO THE RECIPIENT, IN EACH CASE, IF DRAWN AND HELD FOR
 THE DURATION OF THE TERM OR DRAW PERIOD;
   (D) THE TOTAL COST OF THE  FINANCING,  EXPRESSED  AS  A  DOLLAR  COST,
 INCLUDING  ALL  REQUIRED PERIODIC AND NON-PERIODIC FEES AND CHARGES THAT
 CANNOT BE AVOIDED BY A RECIPIENT, INCLUDING ANY  INTEREST  EXPENSE.  THE
 TOTAL COST OF FINANCING SHALL ASSUME THE AMOUNT SCHEDULED TO BE DRAWN BY
 THE  RECIPIENT  AT  THE  TIME  THE OFFER IS EXTENDED, OR IF NO AMOUNT IS
 SCHEDULED TO BE DRAWN AT SUCH TIME, THE MAXIMUM AMOUNT OF CREDIT  AVAIL-
 ABLE  TO THE RECIPIENT, IN EACH CASE, IF DRAWN AND HELD FOR THE DURATION
 OF THE TERM OR DRAW PERIOD;
   (E) THE ANNUAL PERCENTAGE RATE, EXPRESSED AS A  NOMINAL  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.  §
 1026.14;
   (F)  THE  TERM  OF THE PLAN, IF APPLICABLE, OR THE PERIOD OVER WHICH A
 DRAW IS AMORTIZED;
   (G) 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;
   (H)  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;
   (I) PREPAYMENT CHARGES, OR A DESCRIPTION  OF  ANY  FEES,  EXPENSES  OR
 CHARGES  DUE WHEN THE DRAW AMOUNT IS PAID IN FULL OR THE LINE IS CLOSED;
 AND
   (J) A DESCRIPTION OF ANY COLLATERAL REQUIREMENTS  OR  SECURITY  INTER-
 ESTS.
   § 706. 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.
   § 707. ESTIMATES. IF ANY INFORMATION NECESSARY FOR AN ACCURATE DISCLO-
 SURE IS UNKNOWN TO THE PROVIDER AT THE TIME OF  A  COMMERCIAL  FINANCING
 OFFER, THE PROVIDER SHALL MAKE THE REQUIRED DISCLOSURE BASED ON THE BEST
 INFORMATION  REASONABLY AVAILABLE AT THE TIME THE DISCLOSURE IS PROVIDED
 AND SHALL STATE CLEARLY THAT THE  DISCLOSURE  IS  AN  ESTIMATE.  IF  THE
 PROVIDER  IS  REQUIRED  TO  MAKE ANY ASSUMPTIONS TO PROVIDE THE REQUIRED
 DISCLOSURE,  SUCH  ASSUMPTIONS  SHALL  BE  CLEARLY   AND   CONSPICUOUSLY
 DESCRIBED TO THE RECIPIENT IN WRITING AT THE TIME OF THE OFFER.
   § 708. PENALTIES. (A) A PROVIDER THAT KNOWINGLY VIOLATES ANY PROVISION
 OF  THIS  ARTICLE,  AS DETERMINED BY THE SUPERINTENDENT, SHALL BE LIABLE
 FOR AN AGGREGATE CIVIL PENALTY OF NOT MORE THAN TEN THOUSAND DOLLARS FOR
 SUCH VIOLATION, REGARDLESS OF THE NUMBER OF RECIPIENTS AFFECTED  BY  THE

 S. 5470                             6
 
 VIOLATION.  THE  PENALTY SHALL BE COLLECTED BY THE SUPERINTENDENT IN THE
 NAME OF THE STATE PURSUANT TO EXISTING AUTHORITY AVAILABLE TO THE SUPER-
 INTENDENT UNDER STATE LAW.
   (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  ACT,  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 immediately.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5470--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                May 1, 2019
                                ___________
 
 Introduced  by  Sen.  THOMAS -- 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

 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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11387-02-0

 S. 5470--A                          2
 
 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
 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

 S. 5470--A                          3
 
 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.
   (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.

 S. 5470--A                          4
 
   (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
 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:

 S. 5470--A                          5
 
   (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.
   § 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:

 S. 5470--A                          6
 
   (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
 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.

 S. 5470--A                          7
 
   (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
 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.

 S. 5470--A                          8
 
   (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.
   § 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

 S. 5470--A                          9
 
 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.
 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.