Recently, the governor of Texas signed HB 700 into law, amending Title 5 of the Texas Finance Code to establish new disclosure and registration requirements for certain commercial sales-based financing transactions. Under the new law, both providers and brokers that engage in commercial sales-based financing of less than $1 million must disclose key terms of the financing transaction to the recipient of the financing, including the total financing amount, disbursement amount, finance charge, total repayment amount, payment amounts, other potential fees, and collateral requirements. The statute also requires providers and brokers to register with the state’s Office of Consumer Credit Commissioner by December 31, 2026. The statute exempts several types of entities from its requirements, including banks and credit unions, among others. The law grants enforcers to impose a civil penalty of $10,000 for each found violation but does not create a private right of action. The law becomes effective on September 1, 2025.
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