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This entry was published on 2022-01-07
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Open-end commercial financing disclosure requirements
Financial Services Law (FIS) CHAPTER 18-A, ARTICLE 8
§ 805. 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 a specific offer for
open-end financing according to formatting prescribed by the

(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
recipient at the time the offer is extended, if any, less any fees
deducted or withheld at disbursement.

(b) The finance charge.

(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
Lending 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, regardless of
whether such act or such regulation would require such a calculation.

(d) The total repayment amount, which is the draw amount, less any
fees deducted or withheld at disbursement, plus the finance charge. 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) Were the recipient to elect 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
maximum 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