Financial Institutions and Activities - Licensing Requirements and Regulation of Commercial Financing

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0881*

SENATE BILL 881
I1 6lr2830
SB 754/25 – FIN CF HB 1007
By: Senator Kramer
Introduced and read first time: February 6, 2026
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 3, 2026

CHAPTER ______

AN ACT concerning 1

Financial Institutions and Activities – Licensing Requirements and Regulation 2
of Commercial Financing – Small Business Truth in Lending Act 3

FOR the purpose of regulating commercial financing transactions, including by 4
establishing requirements related to certain disclosures, calculations of annual 5
percentage rates, terms of repayments, and other related items, and the extension of 6
specific offers; providing that the revocation, suspension, surrender, or other 7
termination of a certain license does not relieve a person of the obligation to pay 8
certain assessments imposed by the Commissioner of Financial Regulation; 9
prohibiting a person from engaging in the business of commercial financing unless 10
that person is licensed by the Commissioner or exempt from the licensing 11
requirement; establishing certain requirements and other provisions governing the 12
licensing and regulation of a perso n engaging in the business of commercial 13
financing, including applications, Nationwide Multistate Licensing System (NMLS) 14
information, use of trade names, examination, and enforcement; and generally 15
relating to commercial financing transactions and the licensing of financial services 16
providers. 17

BY adding to 18
Article – Commercial Law 19
Section 12 –1601 through 12 –1616 to be under the new subtitle “Subtitle 16. 20
Commercial Financing – Credit Provisions” 21
Annotated Code of Maryland 22
(2013 Replacement Volume and 2025 Supplement) 23

2 SENATE BILL 881

BY repealing and reenacting, with amendments, 1
Article – Financial Institutions 2
Section 2–120 3
Annotated Code of Maryland 4
(2020 Replacement Volume and 2025 Supplement) 5

BY adding to 6
Article – Financial Institutions 7
Section 12–1301 14–101 through 12–1314 14–213 to be under the new subtitle title 8
“Subtitle 13. Title 14. Commercial Financing” 9
Annotated Code of Maryland 10
(2020 Replacement Volume and 2025 Supplement) 11

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12
That the Laws of Maryland read as follows: 13

Article – Financial Institutions Commercial Law 14

SUBTITLE 13. 16. COMMERCIAL FINANCING – CREDIT PROVISIONS. 15

12–1301. 12–1601. 16

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 17
INDICATED. 18

(B) (1) “CLOSED–END FINANCING” MEANS A CLOSED–END EXTENSION OF 19
CREDIT, SECURED OR UNSECURED, INCLUDING EQUIPMENT FINANCING, THAT: 20

(I) DOES NOT MEET THE DEF INITION OF A LEASE U NDER 21
ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE; AND 22

(II) THE PROCEEDS OF WHICH A RECIPIENT DOES NOT INTEND 23
TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. 24

(2) “CLOSED–END FINANCING” INCLUDES FINANCING T HAT HAS AN 25
ESTABLISHED PRINCIPAL AMOUNT AND DURATION. 26

(C) “COMMERCIAL FINANCING ” MEANS OPEN –END FINANCING , 27
CLOSED–END FINANCING, SALES–BASED FINANCING, A FACTORING TRANSACTION, 28
OR ANOTHER FORM OF FINANCING, THE PROCEEDS OF WHICH THE RECIPIENT DOES 29
NOT INTEND TO USE PR IMARILY FOR PERSONAL , FAMILY, OR HOUSEHOLD 30
PURPOSES. 31

(D) “COMMERCIAL FINANCING TRANSACTION” MEANS A TRANSACTION IN 32
WHICH A PROVIDER EXTENDS COMMERCIAL FINANCING TO A RECIPIENT. 33
SENATE BILL 881 3

(E) “COMMISSIONER” HAS THE MEANING STAT ED IN § 1–101 OF THE 1
FINANCIAL INSTITUTIONS ARTICLE. 2

(D) (F) “FACTORING TRANSACTION” MEANS AN ACCOUNTS RE CEIVABLE 3
PURCHASE TRANSACTION: 4

(1) THAT INCLUDES AN AGRE EMENT TO PURCHASE , TRANSFER, OR 5
SELL A LEGALLY ENFOR CEABLE CLAIM FOR PAY MENT HELD BY A RECIP IENT FOR 6
GOODS THE RECIPIENT HAS SUPPLIED OR SERVICES THE RECIPIENT HAS RENDERED 7
THAT HAVE BEEN ORDERED BUT FOR WHICH PAYMENT HAS NOT BEEN MADE; AND 8

(2) THE PROCEEDS OF WHICH THE RECIPIENT DOES NOT INTEND TO 9
USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. 10

(E) (G) (1) “FINANCE CHARGE ” MEANS THE COST OF CO MMERCIAL 11
FINANCING REPRESENTED AS A DOLLAR AMOUNT. 12

(2) “FINANCE CHARGE” INCLUDES: 13

(I) A CHARGE PAYABLE DIREC TLY OR INDIRECTLY BY A 14
RECIPIENT AND IMPOSE D DIRECTLY OR INDIRE CTLY BY A PROVIDER A S AN 15
INCIDENT TO OR A CONDITION OF THE EXTENSION OF COMMERCIAL FINANCING; 16

(II) A CHARGE THAT WOULD BE INCLUDED UNDER 12 C.F.R. § 17
1026.4 IF A TRANSACTION WERE SUBJECT TO 12 C.F.R. § 1026.4; AND 18

(III) ANY ADDITIONAL CHARGE S DETERMINED BY THE 19
COMMISSIONER BY REGULATION. 20

(F) (H) (1) “OPEN–END FINANCING” MEANS AN AGREEMENT F OR ONE 21
OR MORE EXTENSIONS O F SECURED OR UNSECUR ED OPEN–END CREDIT , THE 22
PROCEEDS OF WHICH A RECIPIENT DOES NOT I NTEND TO USE PRIMARI LY FOR 23
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. 24

(2) “OPEN–END FINANCING ” INCLUDES CREDIT EXTE NDED BY A 25
PROVIDER UNDER A PLAN IN WHICH: 26

(I) THE PROVIDER REASONAB LY CONTE MPLATES REPEATED 27
TRANSACTIONS; 28

(II) THE PROVIDER MAY IMPO SE A FINANCE CHARGE ON AN 29
OUTSTANDING UNPAID BALANCE; AND 30

4 SENATE BILL 881

(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO A 1
RECIPIENT DURING THE TERM OF THE PLAN , UP TO A LIMIT THAT T HE PROVIDER 2
SETS, IS GENERALLY MADE AVAIL ABLE TO THE EXTENT T HAT ANY OUTSTANDING 3
BALANCE IS REPAID. 4

(I) “PERSON” HAS THE MEANING STAT ED IN § 1–101 OF THE FINANCIAL 5
INSTITUTIONS ARTICLE. 6

(G) (J) (1) “PROVIDER” MEANS A PERSON THAT, EITHER DIRECTLY OR 7
THROUGH A THIRD PARTY, EXTENDS A SPECIFIC OFFER OF COMMERCIAL FINANCING 8
TO A RECIPIENT. 9

(2) “PROVIDER” INCLUDES A PERSON THAT SOLICITS AND PRESENTS 10
A SPECIFIC OFFER OF COMMERCIAL FINANCING ON BEHALF OF A THIRD PARTY. 11

(H) (K) (1) “RECIPIENT” MEANS A PERSON , OR THE PERSON ’S 12
AUTHORIZED REPRESENTATIVE, THAT APPLIES FOR COMMERCIAL FINANCING AND 13
IS MADE A SPECIFIC OFFER OF COMMERCIAL FINANCING BY A PROVIDER. 14

(2) “RECIPIENT” DOES NOT INCLUDE A P ERSON ACTING AS A 15
BROKER. 16

(I) (L) (1) “SALES–BASED FINANCING” MEANS A TRANSACTION: 17

(I) THAT IS REPAID BY A RECIPIENT TO A PROVIDER OVER TIME 18
AS A PERCENTAGE OF S ALES OR REVENUE, IN WHICH THE PAYMENT AMOUNT MAY 19
INCREASE OR DECREASE ACCORDING TO THE VOLUME OF SALES MADE OR REVENUE 20
RECEIVED BY THE RECIPIENT; AND 21

(II) THE PROCEEDS OF WHICH THE RECIPIE NT DOES NOT 22
INTEND TO USE PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. 23

(2) “SALES–BASED FINANCING ” INCLUDES A TRANSACTI ON 24
CONTAINING A TRUE–UP MECHANISM UNDER WHICH THE FINANCING IS REPAID AS 25
A FIXED PAYMENT BUT PROVIDES FOR A RECONCILIATION PROCESS THAT ADJUSTS 26
THE PAYMENT TO AN AMOUNT THAT IS A PERCENTAGE OF SALES OR REVENUE. 27

(J) (M) “SPECIFIC OFFER ” MEANS THE TERMS OF C OMMERCIAL 28
FINANCING THAT ARE QUOTED TO A RECIPIENT, BASED ON INFORMATION OBTAINED 29
FROM OR ABOUT THE RECIPIENT, THAT, IF ACCEPTED BY THE R ECIPIENT, ARE 30
BINDING ON A PROVIDER, AS APPLICABLE, SUBJECT TO REQUIREMENTS STATED IN 31
THE TERMS OF THE COMMERCIAL FINANCING. 32

12–1302. 12–1602. 33
SENATE BILL 881 5

THIS SUBTITLE DOES NOT APPLY TO: 1

(1) (I) A FEDERAL OR STATE BANK, CREDIT UNION, OR SAVINGS 2
ASSOCIATION INCORPORATED OR CHARTERED UNDER THE LAWS OF ANY STATE OR 3
THE UNITED STATES; OR 4

(II) A SUBSIDIARY OR AFFILIATE OF AN ORGANIZATION LISTED 5
IN ITEM (I) OF THIS ITEM; 6

(2) A PERSON ACTING AS A TECHNOLOGY SERVICES PROVIDER TO AN 7
ENTITY EXEMPT UNDER THIS SECTION FOR USE AS PART OF THE ENTIT Y’S 8
COMMERCIAL FINANCING PROGRAM IF THE PERSON DOES NOT HAVE AN INTEREST, 9
ARRANGEMENT, OR AGREEMENT TO PURCHASE ANY INTEREST IN THE COMMERCIAL 10
FINANCING EXTENDED B Y THE ENTITY IN CONNECTION WITH THE COMMERCIAL 11
FINANCING PROGRAM; 12

(3) A LENDER REGULATED UNDER THE FEDERAL FARM CREDIT ACT; 13

(4) A COMMERCIAL FINANCING TRANSACTION SECURED BY REAL 14
PROPERTY; 15

(5) A LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM 16
COMMERCIAL CODE; 17

(6) A PROVIDER OR OTHER PE RSON WHO MAKES NOT M ORE THAN 18
FIVE COMMERCIAL FINA NCING TRANSACTIONS I N THE STATE IN A 12–MONTH 19
PERIOD; 20

(7) A COMMERCIAL FINANCING TRANSACTION OF MORE THAN 21
$2,500,000; 22

(8) A COMMERCIAL FINANCING TRANSACTION: 23

(I) IN WHICH THE RECIPIENT IS: 24

1. A DEALER, OR AN AFFILIATE OF A DEALER, AS 25
DEFINED IN § 11–111 OF THE TRANSPORTATION ARTICLE; OR 26

2. A RENTAL VEHICLE COMPANY, OR AN AFFILIATE OF A 27
RENTAL VEHICLE COMPA NY, AS DEFINED IN § 18–108 OF THE TRANSPORTATION 28
ARTICLE; AND 29

6 SENATE BILL 881

(II) MADE UNDER A COMMERCI AL FINANCING AGREEMENT OR 1
COMMERCIAL OPEN –END CREDIT PLAN OF A T LEAST $50,000, INCLUDING A 2
COMMERCIAL LOAN MADE IN ACCORDANCE WITH T HE COMMERCIAL FINANC ING 3
TRANSACTION; 4

(9) A COMMERCIAL FINANCING TRANSACTION THAT IS A FACTORING 5
TRANSACTION, AN ADVANCE , OR A SIMILAR TRANSAC TION OF ACCOUNTS 6
RECEIVABLE OWED TO A HEALTH CARE PROVIDER BECAUSE OF A PATIENT ’S 7
PERSONAL INJURY TREATED BY THE HEALTH CARE PROVIDER; OR 8

(10) A PREMIUM FINANCE AGRE EMENT, AS DEFINED IN § 23–101 OF 9
THE INSURANCE ARTICLE. 10

12–1303. 12–1603. 11

(A) EXCEPT AS PROVIDED IN § 12–1307 § 12–1607 OF THIS SUBTITLE, FOR 12
PURPOSES OF THIS SUBTITLE, AN ANNUAL PERCENTAGE RATE SHALL BE: 13

(1) EXPRESSED AS A YEARLY RATE, INCLUDING ALL FEES A ND 14
FINANCE CHARGES; AND 15

(2) CALCULATED IN ACCORDA NCE WITH THE FEDERAL TRUTH IN 16
LENDING ACT. 17

(B) IN ADDITION TO THE RE QUIREMENTS OF SUBSEC TION (A)(2) OF THIS 18
SECTION, AN ANNUAL PERCENTAGE RATE SHALL BE CALCUL ATED BASED ON THE 19
ESTIMATED TERM OF RE PAYMENT AND THE PROJ ECTED PERIODI C PAYMENT 20
AMOUNTS OF A COMMERCIAL FINANCING TRANSACTION, REGARDLESS OF WHETHER 21
FEDERAL LAW OR REGULATION WOULD REQUIRE AN ANNUAL PERCENTAGE RATE TO 22
BE CALCULATED FOR A CERTAIN TRANSACTION. 23

(C) THIS SECTION MAY NOT BE CONSTRUED TO IMPOSE ANY LIABILITY ON A 24
PROVIDER THAT CHARGES AN ANNUAL PERCENTAGE RATE THAT DIFFERS FROM THE 25
ESTIMATED ANNUAL PER CENTAGE RATE DISCLOS ED BY THE PROVIDER I N 26
ACCORDANCE WITH THIS SUBTITLE OR ANY REGU LATION ADOPTED UNDER THIS 27
SUBTITLE. 28

12–1304. 12–1604. 29

(A) IN THIS SECTION , “TOTAL REPAYMENT AMOUNT ” MEANS THE 30
DISBURSEMENT AMOUNT OF A SALES –BASED FINANCING TRAN SACTION PLUS THE 31
FINANCE CHARGE. 32

SENATE BILL 881 7

(B) (1) A PROVIDER SHALL DISCLOSE THE FOLLOWING INFORMATION TO 1
A RECIPIENT WHEN EXTENDING A SPECIFIC OFFER OF SALES–BASED FINANCING: 2

(I) THE TOTAL AMOUNT OF THE SALES–BASED FINANCING AND 3
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 4
MINUS ANY FEES DEDUCTED OR WITHHELD AT DISBURSEMENT; 5

(II) THE FINANCE CHARGE; 6

(III) THE ESTIMATED ANNUAL PERCENTAGE RATE OF T HE 7
SALES–BASED FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RATE” OR THE 8
ABBREVIATION “APR”; 9

(IV) THE TOTAL REPAYMENT AMOUNT; 10

(V) THE ESTIMATED TERM OF REPAYMENT, AS DEFINED IN § 11
12–1305 12–1605 OF THIS SUBTITLE; 12

(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 13
PROJECTED PERIODIC PAYMENT AMOUNTS; 14

(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 15
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES, LATE 16
PAYMENT FEES, AND RETURNED PAYMENT FEES; AND 17

(VIII) IF APPLICABLE , A DESCRIPTION OF COLLA TERAL 18
REQUIREMENTS OR SECURITY INTERESTS. 19

(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 20
SHALL DISCLOSE: 21

1. THE PAYMENT AMOUNTS AND FREQUENCY; AND 22

2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 23
MONTHLY, THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS PER MONTH. 24

(II) FOR PAYMENT AMOUNTS THAT ARE VARIABLE, A PROVIDER 25
SHALL DISCLOSE: 26

1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 27
METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF PAYMENTS; AND 28

2. THE AMOUNT OF THE AVERAGE PROJE CTED 29
PAYMENTS PER MONTH. 30
8 SENATE BILL 881

(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE SALES–BASED 1
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 2
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 3
PAY: 4

(I) ANY F INANCE CHARGES OTHER THAN THE INTEREST 5
ACCRUED SINCE THE RECIPIENT’S LAST PAYMENT; AND 6

(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 7
CHARGE. 8

(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 9
FINANCE CHARGES OTHER THAN THE INTEREST ACCRUED SINCE THE RECIPIENT’S 10
LAST PAYMENT, A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 11
PORTION OF THE FINAN CE CHARGE AND THE MA XIMUM DOLLAR AMOUNT THE 12
RECIPIENT COULD BE REQUIRED TO PAY. 13

12–1305. 12–1605. 14

(A) IN THIS SECTION , “ESTIMATED TERM OF RE PAYMENT” MEANS THE 15
AMOUNT OF TIME REQUIRED FOR THE PERIODIC PAYMENTS MADE BY A RECIPIENT 16
IN A SALES –BASED FINANCING TRAN SACTION TO EQUAL THE TOTAL AMOUNT 17
REQUIRED TO BE REPAID. 18

(B) (1) A PROVIDER SHALL USE T HE PROJECTED SALES V OLUME OF A 19
RECIPIENT TO CAL CULATE THE FOLLOWING INFORMATION RELATED TO A 20
SALES–BASED FINANCING TRANSACTION: 21

(I) THE ESTIMATED TERM OF REPAYMENT AND THE 22
PROJECTED PAYMENT AMOUNTS OF A SALES–BASED FINANCING TRANSACTION; AND 23

(II) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A 24
SALES–BASED FINANCING TRANSACTION. 25

(2) THE ESTIMATED ANNUAL PERCENTAGE RATE OF A SALES–BASED 26
FINANCING TRANSACTION SHALL BE CALCULATED: 27

(I) IN ACCORDANCE WITH TH E FEDERAL TRUTH IN LENDING 28
ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 29

(II) BASED ON THE ESTIMATED TER M OF REPAYMENT AND 30
PROJECTED SALES VOLUME OF A RECIPIENT. 31

SENATE BILL 881 9

(C) (1) A PROVIDER MAY CALCULATE THE PROJECTED SALES VOLUME OF 1
A RECIPIENT USING EITHER THE HISTORICAL METHOD OR THE OPT–IN METHOD. 2

(2) (I) A PROVIDER THAT USES T HE HISTORICAL METHOD TO 3
CALCULATE THE PROJEC TED SALES VOLUME OF A RECIPIENT SHALL US E AN 4
AVERAGE HISTORICAL VOLUME OF SALES OR REVENUE. 5

(II) A PROVIDER SHALL FIX T HE HISTORICAL TIME P ERIOD 6
USED TO CALCULATE THE AVERAGE HISTORICAL VOLUME AND USE THE SAME TIME 7
PERIOD FOR ALL DISCL OSURE PURPOSES FOR A NY SALES –BASED FINANCING 8
TRANSACTION PRODUCTS OFFERED. 9

(III) EXCEPT AS PROVIDED IN SUBPARAGRAPH (IV) OF THIS 10
PARAGRAPH, THE FIXED HISTORICAL TIME PERIOD: 11

1. MAY NOT BE LESS THAN 1 MONTH AND MAY NOT 12
EXCEED 12 MONTHS; AND 13

2. SHALL BE THE TIME PER IOD DIRECTLY BEFORE THE 14
SPECIFIC OFFER WAS MADE. 15

(IV) A PROVIDER MAY CHOOSE TO USE THE AVERAGE SALES FOR 16
THE SAME NUMBER OF M ONTHS AS THE PROVIDE R WOULD HAVE USED UN DER 17
SUBPARAGRAPH (III) OF THIS PARAGRAPH WITH THE HIGHEST SAL ES VOLUME 18
WITHIN THE PAST 12 MONTHS. 19

(3) A PROVIDER MAY USE THE OPT–IN METHOD TO DETERMI NE THE 20
INFORMATION LISTED U NDER SUBSECTION (B)(1) OF THIS SECTION BY U SING A 21
PROJECTED SALES VOLUME THAT THE PROVIDER CHOOSES FOR EACH DISCLOSURE 22
IF THE RECIPIENT PAR TICIPATES IN A REVIE W PROCESS ESTABLISHE D BY THE 23
COMMISSIONER. 24

(D) A PROVIDER SHALL NOTIFY THE COMMISSIONER OF WHICH OF THE TWO 25
METHODS THE PROVIDER INTENDS TO USE WHEN CALCULATING THE ESTI MATED 26
ANNUAL PERCENTAGE RATE OF EACH SALES–BASED FINANCING TRANSACTION. 27

(E) (1) ON OR BEFORE JANUARY 1 EACH YEAR , 2028, AND EACH 28
JANUARY 1 THEREAFTER, A PROVIDER THAT ELECTS TO USE THE OPT –IN METHOD 29
UNDER SUBSECTION (C)(3) OF THIS SECTION SHAL L REPORT TO THE 30
COMMISSIONER ON: 31

(I) THE ESTIMATED ANNUAL PERCENTAGE RA TES GIVEN TO 32
EACH RECIPIENT; AND 33

10 SENATE BILL 881

(II) THE ACTUAL ANNUAL PER CENTAGE RATES OF EAC H 1
COMPLETED SALES–BASED FINANCING TRANSACTION. 2

(2) (I) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 3
SUBSECTION SHALL CONTAIN ANY INFORMATION THE COMMISSIONER CONSIDERS 4
NECESSARY TO DETERMI NE WHETHER THE DEVIA TION BETWEEN THE EST IMATED 5
ANNUAL PERCENTAGE RA TES AND ACTUAL ANNUA L PERCENTAGE RATES O F 6
COMPLETED SALES–BASED FINANCING TRANSACTIONS IS REASONABLE. 7

(II) THE COMMISSIONER MAY CONS IDER EXTRAOR DINARY 8
CIRCUMSTANCES WHEN D ETERMINING WHETHER T HE PROVIDER ’S DEVIATION 9
BETWEEN THE ESTIMATE D ANNUAL PERCENTAGE RATE AND ACTUAL ANNU AL 10
PERCENTAGE RATE OF A SALES–BASED FINANCING TRANSACTION IS REASONABLE. 11

(III) IF THE COMMISSIONER FINDS TH AT THERE WAS AN 12
UNREASONABLE DEVIATI ON BETWEEN ESTIMATED AND ACTUAL ANNUAL 13
PERCENTAGE RATES OF SALES–BASED FINANCING TRAN SACTIONS, THE 14
COMMISSIONER MAY REQU IRE THE PROVIDER TO USE THE HISTORICAL M ETHOD 15
INSTEAD OF THE OPT–IN METHOD IN DETERMINING THE PROJECTED SALES VOLUME 16
OF THE RECIPIENT. 17

12–1306. 12–1606. 18

(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 19
DISBURSEMENT AMOUNT OF A CLOSED –END FINANCING TRANSA CTION PLUS THE 20
FINANCE CHARGE. 21

(B) (1) A PROVIDER SHALL DISCLOSE THE FOLLOWING INFORMATION TO 22
A RECIPIENT WHEN EXTENDING A SPECIFIC OFFER FOR CLOSED–END FINANCING: 23

(I) THE TOTAL AMOUNT OF THE CLOSED–END FINANCING AND 24
THE DISBURSEMENT AMO UNT, IF DIFFERENT FROM TH E FINANCING AMOUNT , 25
MINUS ANY FEES DEDUCTED OR WITHHELD AT DISBURSEMENT; 26

(II) THE TOTAL REPAYMENT AMOUNT; 27

(III) THE FINANCE CHARGE; 28

(IV) THE ANNUAL PERCENTAGE RATE OF THE CLOSED –END 29
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 30
ABBREVIATION “APR”; 31

(V) THE TERM OF THE FINANCING; 32

SENATE BILL 881 11

(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, THE 1
PROJECTED PERIODIC PAYMENT AMOUNTS; 2

(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 3
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES, LATE 4
PAYMENT FEES, AND RETURNED PAYMENT FEES; AND 5

(VIII) IF APPLICABLE , A DESC RIPTION OF COLLATERA L 6
REQUIREMENTS OR SECURITY INTERESTS. 7

(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 8
SHALL DISCLOSE: 9

1. THE PAYMENT AMOUNTS AND FREQUENCY; AND 10

2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 11
MONTHLY, THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS PER MONTH. 12

(II) FOR PAYMENT AMOUNTS THAT ARE VARIABLE, A PROVIDER 13
SHALL DISCLOSE: 14

1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 15
METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF PAYMENTS; AND 16

2. THE AMOUNT OF THE AVERAGE PROJECTE D 17
PAYMENTS PER MONTH. 18

(3) THE ANNUAL PERCENTAGE RATE REQUIRED TO BE DISCLOSED 19
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION SHALL BE: 20

(I) EXPRESSED AS A YEARLY RATE, INCLUSIVE OF ANY FEE S 21
AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECIPIENT; AND 22

(II) CALCULATED IN ACCORDANCE WITH THE FEDERAL TRUTH 23
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22, REGARDLESS OF 24
WHETHER FEDERAL LAW OR REGULATION WOULD REQUIRE THE CALCULATION. 25

(C) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE CLOSED –END 26
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 27
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 28
PAY: 29

(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 30
ACCRUED SINCE THE RECIPIENT’S LAST PAYMENT; AND 31
12 SENATE BILL 881

(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 1
CHARGE. 2

(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 3
FINANCE CHARGES OTHER THAN THE INTEREST ACCRUED SINCE THE RECIPIENT’S 4
LAST PAYMENT, A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 5
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 6
RECIPIENT COULD BE REQUIRED TO PAY. 7

12–1307. 12–1607. 8

(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE DRAW 9
AMOUNT OF THE OPEN–END FINANCING TRANSACTION, MINUS ANY FEES DEDUCTED 10
OR WITHHELD AT DISBURSEMENT, PLUS THE FINANCE CHARGE. 11

(B) (1) WHEN CALCULATING THE TOTAL REPAYMENT AMOU NT IN 12
ACCORDANCE WITH THIS SECTION, A PROVIDER SHALL ASS UME A DRAW AMOUNT 13
EQUAL TO THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE TO THE RECIPI ENT IF 14
DRAWN AND HELD FOR THE DURATION OF THE TERM OR DRAW PERIOD. 15

(2) WHEN CALCULATING A FI NANCE CHARGE IN ACCO RDANCE WITH 16
THIS SECTION, A PROVIDER SHALL ASSUME THAT THE MAXIMUM AMOUNT OF CREDIT 17
AVAILABLE TO THE REC IPIENT, IN EACH CASE , IS DRAWN AND HELD FO R THE 18
DURATION OF THE TERM OF THE DRAW PERIOD. 19

(C) (1) A PROVIDER SHALL DISCLOSE THE FOLLOWING INFORMATION TO 20
A RECIPIENT WHEN EXTENDING A SPECIFIC OFFER FOR OPEN–END FINANCING: 21

(I) THE MAXIMUM AMOUNT OF CREDIT AVAILABLE TO THE 22
RECIPIENT AND THE AMOUNT SCHEDULED TO BE DRAWN BY THE RECIPIENT AT THE 23
TIME THE OFFER IS EXTENDED, IF ANY, MINUS ANY FEES DEDUCTED OR WITHHELD 24
AT DISBURSEMENT; 25

(II) THE FINANCE CHARGE; 26

(III) THE TOTAL REPAYMENT AMOUNT; 27

(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 28
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 29
ABBREVIATION “APR”; 30

(V) THE TERM OF THE PLAN , IF APPLICABLE, OR THE PERIOD 31
OVER WHICH A DRAW IS AMORTIZED; 32
SENATE BILL 881 13

(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 1
PAYMENT FREQUENCY AND AMOUNTS; 2

(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 3
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING DRAW FEES, LATE 4
PAYMENT FEES, AND RETURNED PAYMENT FEES; AND 5

(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 6
REQUIREMENTS OR SECURITY INTERESTS. 7

(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 8
SHALL DISCLOSE: 9

1. THE PAYMENT AMOUNTS AND FREQUENCY; AND 10

2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 11
MONTHLY, THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS PER MONTH. 12

(II) FOR PAYMENT AMOUNTS THAT ARE VARIABLE, A PROVIDER 13
SHALL DISCLOSE: 14

1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 15
METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF PAYMENTS; AND 16

2. THE AMOUNT OF THE AVE RAGE PROJECTED 17
PAYMENTS PER MONTH. 18

(3) THE ANNUAL PERCENT AGE RATE REQUIRED TO BE DISCLOSED 19
UNDER PARAGRAPH (1)(IV) OF THIS SUBSECTION SHALL BE: 20

(I) EXPRESSED AS A NOMINA L YEARLY RATE , INCLUSIVE OF 21
ANY FEES AND FINANCE CHARGES THAT CANNOT BE AVOIDED BY A RECIPIENT; 22

(II) CALCULATED IN ACCORDANCE WITH THE FEDERAL TRUTH 23
IN LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026.22; AND 24

(III) BASED ON THE MAXIMUM AMOUNT OF CREDIT AVA ILABLE 25
TO THE RECIPIENT AND THE TERM RESULTING F ROM MAKING THE MINIM UM 26
REQUIRED PAYMENTS AS DISCLOSED, REGARDLESS OF WHETHER FEDERAL LAW OR 27
REGULATION WOULD REQUIRE THE CALCULATION. 28

(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE OPEN–END 29
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 30
14 SENATE BILL 881

PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 1
PAY: 2

(I) ANY F INANCE CHARGES OTHER THAN THE INTEREST 3
ACCRUED SINCE THE RECIPIENT’S LAST PAYMENT; AND 4

(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 5
CHARGE. 6

(2) IF A RECIPIENT WOULD BE REQUIRED TO PAY A DDITIONAL 7
FINANCE CHARGES OTHER THAN THE INTEREST ACCRUED SINCE THE RECIPIENT’S 8
LAST PAYMENT, A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 9
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 10
RECIPIENT COULD BE REQUIRED TO PAY. 11

12–1308. 12–1608. 12

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 13
INDICATED. 14

(2) “FINANCE CHARGE” INCLUDES A DISCOUNT TAKEN ON THE FACE 15
VALUE OF THE ACCOUNTS RECEIVABLE. 16

(3) “TOTAL PAYMENT AMOUNT” MEANS THE PURCHASE A MOUNT OF 17
THE FACTORING TRANSACTION PLUS THE FINANCE CHARGE. 18

(B) A PROVIDER SHALL DISCLOSE THE F OLLOWING INFORMATION TO A 19
RECIPIENT WHEN EXTENDING A SPECIFIC OFFER FOR A FACTORING TRANSACTION: 20

(1) THE AMOUNT OF THE REC EIVABLES PURCHASE PR ICE PAID TO 21
THE RECIPIENT AND , IF DIFFERENT FROM TH E PURCHASE PRICE , THE 22
DISBURSEMENT AMOUN T AFTER ANY FEES DED UCTED OR WITHHELD AT 23
DISBURSEMENT; 24

(2) THE TOTAL PAYMENT AMOUNT; 25

(3) THE FINANCE CHARGE; 26

(4) THE ANNUAL PERCENTAGE RATE OF THE FACTORIN G 27
TRANSACTION, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 28
ABBREVIATION “APR”, CALCULATED ACCORDING TO THE F EDERAL TRUTH IN 29
LENDING ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE 30
ADVANCE, SINGLE PAYMENT TRANSACTION”; 31

SENATE BILL 881 15

(5) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND CHARGES 1
THAT CAN BE AVOIDED BY THE RECIPIENT; AND 2

(6) A DESCRIPTION OF THE R ECEIVABLES PURCHASED AND, IF 3
APPLICABLE, ANY ADDITIONAL COLLA TERAL REQUIREMENTS O R SECURITY 4
INTERESTS. 5

(C) (1) FOR PURPOSES OF THIS SUBSECTION, THE ANNUAL PERCENTAGE 6
RATE SHALL BE CALCUL ATED ACCORDING TO TH E FEDERAL TRUTH IN LENDING 7
ACT AND REGULATION Z, 12 C.F.R. § 1026, APPENDIX J, AS A “SINGLE ADVANCE, 8
SINGLE PAYMENT TRANS ACTION”, REGARDLESS OF WHETHE R FEDERAL LAW OR 9
REGULATION WOULD REQUIRE AN ANNUAL PERCENTAGE RATE TO BE CALCULATED 10
FOR A CERTAIN TRANSACTION. 11

(2) (I) SUBJECT TO SUBPARAGRAP H (II) OF THIS PARAGRAPH , A 12
PROVIDER SHALL USE T HE FOLLOWING INFORMA TION TO CALCULATE TH E 13
ESTIMATED ANNUAL PERCENTAGE RATE IN ACCORDANCE WITH THIS SECTION: 14

1. THE PURCHASE AMOUNT IS THE FINANCING AMOUNT; 15

2. THE PAYMENT AMOUNT IS THE PURCHASE AMOU NT 16
MINUS THE FINANCE CHARGE; AND 17

3. THE TERM OF THE FACTO RING TRANSACTION IS 18
DETERMINED BY THE PAYMENT DUE DATE OF THE RECEIVABLES. 19

(II) A PROVIDER MAY ESTIMAT E THE TERM FOR A FAC TORING 20
TRANSACTION AS THE AVERAGE PAYMENT PERIOD, USING HISTORICAL DATA OVER 21
A PERIOD NOT TO EXCE ED THE PREVIOUS 12 MONTHS, CONCERNING PAYMENT 22
INVOICES PAID BY THE PARTY OWING THE ACCOUNTS RECEIVABLE IN QUESTION. 23

12–1309. 12–1609. 24

(A) IN THIS SECTION , “TOTAL REPAYMENT AMOU NT” MEANS THE 25
DISBURSEMENT AMOUNT OF A COM MERCIAL FINANCING TR ANSACTION PLUS THE 26
FINANCE CHARGE. 27

(B) A PROVIDER MAY EXTEND A SPECIFIC OFFER OF COMMERCIAL 28
FINANCING THAT IS NO T AN OPEN –END FINANCING, A CLOSED–END FINANCING, A 29
SALES–BASED FINANCING, OR A FACTORING TRANSACTION BUT OTHERWISE MEETS 30
THE DEFINITION OF COMMERCIAL FINANCING UNDER THIS SUBTITLE. 31

(C) (1) IF A PROVIDER EXTENDS A SPECIFIC OFFER THA T IS NOT AN 32
OPEN–END FINANCING, A CLOSED–END FINANCING, A SALES–BASED FINANCING, OR 33
16 SENATE BILL 881

A FACTORING TRANSACT ION BUT OTHERWISE ME ETS THE DEFINITION O F 1
COMMERCIAL FINANCING UNDER THIS SUBTITLE, THE PROVIDER SHALL DISCLOSE: 2

(I) THE TOTAL AMOUNT OF T HE COMMERCIAL FINANC ING 3
INCLUDING THE DISBUR SEMENT AMOUNT , IF DIFFERENT FROM TH E FINANCING 4
AMOUNT, MINUS ANY FEES DEDUCTED OR WITHHELD AT DISBURSEMENT; 5

(II) THE TOTAL REPAYMENT AMOUNT; 6

(III) THE FINANCE CHARGE; 7

(IV) THE ANNUAL PERCENTAGE RATE OF THE COMMERCI AL 8
FINANCING, USING THE WORDS “ANNUAL PERCENTAGE RA TE” OR THE 9
ABBREVIATION “APR”, EXPRESSED AS A YEARL Y RATE , INCLUSIVE OF ANY FEES 10
AND FINANCE CHARGES , AND CALCULATED IN AC CORDANCE WITH THE RE LEVANT 11
SECTIONS OF THE FEDERAL TRUTH IN LENDING ACT, REGULATION Z, 12 C.F.R. § 12
1026.22, OR THIS ARTICLE , REGARDLESS OF WHETHE R FEDERAL LAW , THE 13
REGULATION, OR THIS ARTICLE WOULD REQUIRE THE CALCULATION; 14

(V) THE TERM OF THE COMMERCIAL FINANCING; 15

(VI) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 16
PAYMENT FREQUENCY AND AMOUNTS; 17

(VII) A DESCRIPTION OF ANY O THER POTENTIAL FEES AND 18
CHARGES NOT INCLUDED IN THE FINANCE CHARG E, INCLUDING LATE PAYMEN T 19
FEES AND RETURNED PAYMENT FEES; AND 20

(VIII) IF APPLICABLE , A DESCRIPTION OF COL LATERAL 21
REQUIREMENTS OR SECURITY INTERESTS. 22

(2) (I) FOR PAYMENT AMOUNTS T HAT ARE FIXED , A PROVIDER 23
SHALL DISCLOSE: 24

1. THE PAYMENT AMOUNTS AND FREQUENCY; AND 25

2. IF THE PAYMENT FREQUE NCY IS OTHER THAN 26
MONTHLY, THE AMOUNT OF THE AVERAGE PROJECTED PAYMENTS PER MONTH. 27

(II) FOR PAYMENT AMOUNTS THAT ARE VARIABLE, A PROVIDER 28
SHALL DISCLOSE: 29

1. THE PAYMENT SCHEDULE OR A DESCRIPTION OF THE 30
METHOD USED TO CALCULATE THE AMOUNTS AND FREQUENCY OF PAYMENTS; AND 31
SENATE BILL 881 17

2. THE AMOUNT OF THE AVE RAGE PROJECTED 1
PAYMENTS PER MONTH. 2

(D) (1) IF A RECIPIENT PAYS O FF OR REFINANCES THE COMMERCIAL 3
FINANCING BEFORE THE END OF THE SCHEDULED REPAYMENT PERIOD , A 4
PROVIDER SHALL DISCL OSE WHETHER THE RECI PIENT WOULD BE REQUI RED TO 5
PAY: 6

(I) ANY FINANCE CHARGES O THER THAN THE INTERE ST 7
ACCRUED SINCE THE RECIPIENT’S LAST PAYMENT; AND 8

(II) ANY ADDITIONAL FEES N OT INCLUDED IN THE F INANCE 9
CHARGE. 10

(2) IF A RECIPIE NT WOULD BE REQUIRED TO PAY ADDITIONAL 11
FINANCE CHARGES OTHER THAN THE INTEREST ACCRUED SINCE THE RECIPIENT’S 12
LAST PAYMENT, A PROVIDER SHALL DIS CLOSE THE PERCENTAGE OF ANY UNPAID 13
PORTION OF THE FINAN CE CHARGE AND MAXIMU M DOLLAR AMOUNT THE 14
RECIPIENT COULD BE REQUIRED TO PAY. 15

12–1310. 12–1610. 16

(A) A PROVIDER MAY REQUIRE A RECIPIENT TO PAY OFF THE BALANCE OF 17
AN EXISTING COMMERCI AL FINANCING TRANSAC TION FROM THE SAME P ROVIDER 18
AS A CONDITION OF OB TAINING A NEW OR REN EWAL COMMERCIAL FINA NCING 19
TRANSACTION. 20

(B) IF A PROVIDER REQUIRE S A RECIPIENT TO PAY OFF A COMMERCIAL 21
FINANCING TRANSACTION BEFORE OBTAINING A NEW OR RENEWAL COMME RCIAL 22
FINANCING TRANSACTION, THE PROVIDER SHALL DISCLOSE: 23

(1) THE AMOUNT OF THE NEW OR RENEWAL COMMERCIAL FINANCING 24
THAT WILL BE USED TO PAY OFF THE PORTION OF THE EXIST ING COMMERCIAL 25
FINANCING THAT CONSISTS OF ANY REQUIRED PREPAYMENT CHARGES; AND 26

(2) ANY UNPAID INTEREST T HAT WAS NOT FORGIVEN AT THE TIME 27
THE RECIPIENT ENTERED INTO THE NEW OR RENEWAL COMMERCIAL FINANCING. 28

(C) (1) FOR FINANCING FOR WHICH THE TOTAL REPAYMENT AMOUNT IS 29
CALCULATED AS A FIXE D AMOUNT, THE PREPAYMENT CHARG E IS EQUAL TO THE 30
ORIGINAL FINANCE CHA RGE MULTIPLIED BY TH E AMOUNT OF THE NEW OR 31
RENEWAL COMMERCIAL FINANCING USED TO PAY OFF THE EXISTING COMMERCIAL 32
FINANCING TRANSACTION AS A PERCENTAGE OF THE TOTAL REPAYMENT AMOUNT, 33
18 SENATE BILL 881

MINUS ANY PORTION OF THE TOTAL REPAYMENT AMOUNT FORGIVEN BY T HE 1
PROVIDER AT THE TIME OF PREPAYMENT. 2

(2) IF THE PREPAYMENT CHA RGE IS MORE THAN ZER O, THE 3
PROVIDER SHALL RECOR D THE AMOUNT AS THE ANSWER TO THE FOLLOWING 4
QUESTION: 5

“DOES THE NEW OR RENEW AL COMMERCIAL FINANC ING TRANSACTION INCL UDE 6
ANY AMOUNT THAT IS U SED TO PAY UNPAID FI NANCE CHARGES OR FEE S, ALSO 7
KNOWN AS DOUBLE DIPPING? YES, (ENTER AMOUNT)”. 8

(D) IF THE DISBURSEMENT A MOUNT OF THE NEW OR RENEWA L 9
COMMERCIAL FINANCING TRANSACTION WILL BE REDUCED TO PAY DOWN ANY 10
UNPAID PORTION OF THE OUTSTANDING BALANCE OF THE EXISTING CO MMERCIAL 11
FINANCING, THE PROVIDER SHALL D ISCLOSE THE ACTUAL D OLLAR AMOUNT BY 12
WHICH THE DISBURSEMENT AMOUNT WILL BE REDUCED. 13

12–1311. 12–1611. 14

A RECIPIENT SHALL SIGN , MANUALLY OR ELECTRON ICALLY, EACH 15
APPLICABLE DISCLOSURE REQUIRED UNDER THI S SUBTITLE BEFORE A PROVIDER 16
MAY ALLOW THE RECIPI ENT TO PROCEED WITH THE COMMERCIAL FINAN CING 17
APPLICATION. 18

12–1312. 12–1612. 19

(A) (1) NOTHING IN THIS SUBTI TLE MAY BE CONSTRUED TO PREVENT A 20
PROVIDER FROM DISCLO SING ADDITIONAL INFO RMATION TO A RECIPIE NT 21
REGARDING A COMMERCIAL FINANCING TRANSACTION. 22

(2) IF A PROVIDER PROVIDE S AN ADDITIONAL DISC LOSURE TO A 23
RECIPIENT OTHER THAN WHAT IS REQU IRED BY THIS SUBTITL E, THE ADDITIONAL 24
DISCLOSURE IS NOT CONSIDERED A REQUIRED DISCLOSURE UNDER THIS SUBTITLE. 25

(B) (1) IF ADDITIONAL METRICS OF FINANCING COSTS A RE DISCLOSED 26
OR USED IN THE APPLI CATION PROCESS FOR C OMMERCIAL FINANCING , THE 27
ADDITIONAL METRICS M AY NOT BE PRESENTED AS A RATE IF THEY AR E NOT THE 28
ANNUAL INTEREST RATE OR THE ANNUAL PERCENTAGE RATE. 29

(2) THE TERM “INTEREST”, WHEN USED TO DESCRIBE A PERCENTAGE 30
RATE, MAY BE USED ONLY TO DESCRIBE ANNUAL PERCENTAGE RATES, INCLUDING 31
THE ANNUAL INTEREST RATE. 32

SENATE BILL 881 19

(C) IF A PROVIDER STATES A RATE OF FINANCE CH ARGE OR A FINANCING 1
AMOUNT TO A RECIPIEN T DURING THE APPLICA TION PROCESS FOR COM MERCIAL 2
FINANCING, THE PROVIDER SHALL A LSO STATE THE RATE A S AN “ANNUAL 3
PERCENTAGE RATE”, USING THAT TERM OR THE ABBREVIATION “APR”. 4

12–1313. 12–1613. 5

(A) TO CARRY OUT THIS SUBTITLE, THE COMMISSIONER SHALL MAY ADOPT 6
REGULATIONS SUBSTANTIALLY THE SAME AS REGULATIONS ADOPTED BY THE NEW 7
YORK STATE DEPARTMENT OF FINANCIAL SERVICES REGARDING CO MMERCIAL 8
FINANCING. 9

(B) THE COMMISSIONER SHALL MAY APPROVE THE USE OF C OMMERCIAL 10
FINANCING DISCLOSURE FORMS APPROVED FOR U SE IN OTHER STATES W ITH 11
COMMERCIAL FINANCING DISCLOSURE REQUIREMENTS THAT ARE SUBSTANTIALLY 12
SIMILAR TO OR EXCEED THE REQUIREMENTS OF THIS SUBTITLE. 13

12–1314. 12–1614. 14

(A) (1) THE COMMISSIONER SHALL IM POSE A CIVIL PENALTY NOT 15
EXCEEDING: 16

(I) $2,000 FOR EACH VIOLATION OF THIS SUBTITLE; AND 17

(II) $10,000 FOR EACH WILLFUL VIOLATION OF THIS SUBTITLE. 18

(2) THE COMMISSIONER MAY ORDE R ADDITIONAL RELIEF , 19
INCLUDING RESTITUTIO N OR A PERMANENT OR PRELIMINARY INJUNCTI ON ON 20
BEHALF OF A RECIPIENT AFFECTED BY A VIOLATION OF THIS SUBTITLE. 21

(B) IF A COMPLAINT ABOUT A VIOLATION OF THIS SUBTITLE IS FILED WITH 22
THE COMMISSIONER, THE THE COMMISSIONER MAY INVESTIGATE THE COMPLAINT 23
AND USE ANY OF THE INVESTIGATIVE AN D ENFORCEMENT POWERS PROVIDED 24
UNDER TITLE 2, SUBTITLE 1 OF THIS ARTICLE §§ 2–113 THROUGH 2–116 OF THE 25
FINANCIAL INSTITUTIONS ARTICLE TO ENFORCE THIS SUBTITLE. 26

12–1615. 27

THE STATE’S ATTORNEY FOR THE COUNTY IN WHICH THE VIOLATION OCCURS 28
OR THE ATTORNEY GENERAL MAY PROSECUTE ANY VIOLATION OF THIS SUBTITLE. 29

12–1616. 30

20 SENATE BILL 881

ANY LICENSEE, AS DEFINED IN § 14–101 OF THE FINANCIAL INSTITUTIONS 1
ARTICLE, THAT KNOWINGLY VIOLATES ANY PROVISION OF THIS SUBTITLE IS GUILTY 2
OF A MISDEMEANOR AND ON CONVICTION IS SUB JECT TO A FINE NOT E XCEEDING 3
$500 OR IMPRISONMENT NOT EXCEEDING 6 MONTHS OR BOTH. 4

Article – Financial Institutions 5

2–120. 6

(a) (1) In this section the following words have the meanings indicated. 7

(2) “Board” means the State Collection Agency Licensing Board established 8
under Title 7 of the Business Regulation Article. 9

(3) “Fund” means the Non–Depository Special Fund established under this 10
section. 11

(4) “License” means any license issued by the Commissioner or the Board 12
under applicable law. 13

(5) “License category” refers to all licenses issued by either the 14
Commissioner or the Board under any of the following provisions: 15

(i) Title 11, Subtitle 2 of this article; 16

(ii) Title 11, Subtitle 3 of this article; 17

(iii) Title 11, Subtitle 4 of this article; 18

(iv) Title 11, Subtitle 5 of this article; 19

(v) Title 11, Subtitle 6 of this article; 20

(vi) Title 12, Subtitle 1 of this article; 21

(vii) Title 12, Subtitle 4 of this article; 22

(viii) Title 12, Subtitle 9 of this article; [or] 23

(IX) TITLE 14, SUBTITLE 2 OF THIS ARTICLE; OR 24

[(ix)] (X) Title 7 of the Business Regulation Article. 25

(6) “Licensed person” means any person required by law to be licensed by 26
either the Commissioner or the Board, regardless of whether the person maintains the 27
required license. 28
SENATE BILL 881 21

(7) “Registered person” means any person required by law to be registered 1
by the Commissioner or the Board, regardless of whether the person maintains the required 2
registration. 3

(8) “Regulated person” means: 4

(i) A licensed person or registered person; or 5

(ii) Any person otherwise engaging in activity subject to a provision 6
of law, regulation, rule, or order over which the Commissioner has jurisdiction, other than 7
activity subject to any of Titles 3 through 9 of this article. 8

(b) There is a Non–Depository Special Fund that consists of: 9

(1) All revenues received from licensing fees from each licensed person; 10

(2) All revenues received from registration fees from each registered 11
person; 12

(3) All revenues received from annual assessments under subsection (h) of 13
this section; 14

(4) Income from the investments that the State Treasurer makes for the 15
Fund; and 16

(5) Any other fee, examination or investigation fee or assessment, or 17
revenue received by the Commissioner or the Board with respect to any regulated person. 18

(c) Notwithstanding subsection (b) of this section: 19

(1) The Commissioner and the Board shall pay all fines and penalties 20
collected from any regulated person into the General Fund of the State; and 21

(2) Revenue received by the Commissioner for use of t he Foreclosed 22
Property Registry established under Title 7 of the Real Property Article shall be paid by 23
the Commissioner to the Foreclosed Property Registry Fund established under § 7 –105.14 24
of the Real Property Article. 25

(d) The purpose of the Fund is to cover the direct and indirect costs of fulfilling 26
the statutory and regulatory duties of the Commissioner and the Board related to regulated 27
persons. 28

(e) (1) The annual State budget shall include the costs and expenses of the 29
Commissioner and the Board relating to subsection (d) of this section. 30

22 SENATE BILL 881

(2) Any expenditures from the Fund to cover costs and expenses of the 1
Commissioner and the Board relating to subsection (d) of this section may be made only: 2

(i) With an appropriation from the Fund approve d by the General 3
Assembly in the annual State budget; or 4

(ii) By the budget amendment procedure under § 7–209 of the State 5
Finance and Procurement Article. 6

(3) If, in any fiscal year, the amount of the revenue collected by the 7
Commissioner and the Board and deposited into the Fund exceeds the actual appropriation 8
for the Commissioner and the Board under paragraph (2)(i) of this subsection, the excess 9
amount shall be carried forward within the Fund. 10

(f) (1) The State Treasurer is the custodian of the Fund. 11

(2) The State Treasurer shall deposit payments received from the 12
Commissioner and the Board into the Fund. 13

(g) (1) (i) The Fund is a special, nonlapsing fund that is not subject to § 14
7–302 of the State Finance and Procurement Article. 15

(ii) The Fund may not be deemed a part of the General Fund of the 16
State. 17

(2) Unless otherwise provided by law, no part of the Fund may revert or be 18
credited to: 19

(i) The General Fund of the State; or 20

(ii) Any other special fund of the State. 21

(h) (1) In order to ensure the Fund contains sufficient amounts to achieve its 22
purpose under subsection (d) of this section, the Commissioner may impose an annual 23
assessment on any licensed person not more than once each year. 24

(2) In calculating an assess ment with respect to any licensed person, the 25
Commissioner may consider: 26

(i) The costs incurred by the Commissioner or the Board in 27
supervising licensed persons of that license category; 28

(ii) The type of business conducted in the State by that lice nsed 29
person; 30

(iii) The volume of business that licensed person conducts in the 31
State; 32
SENATE BILL 881 23

(iv) Assets of the licensed person; and 1

(v) Any other factor the Commissioner considers appropriate. 2

(3) A licensed person shall pay any assessment imposed under this section 3
to the Commissioner within 30 calendar days after the assessment is imposed. 4

(4) THE REVOCATION , SUSPENSION, SURRENDER, OR OTHER 5
TERMINATION OF A LICENSE DOES NOT RELIEVE A PERSON OF THE OBLIGATION TO 6
PAY ANY ASSESSMENT I MPOSED UNDER THIS SECTION WHEN TH E LICENSE WAS 7
VALID. 8

[(4)] (5) (i) Failure by a licensed person to timely pay an annual 9
assessment under this section is a violation of this section. 10

(ii) The Commissioner may take action for the violation against the 11
licensed person and the license under applicable law. 12

TITLE 14. COMMERCIAL FINANCING. 13

SUBTITLE 1. GENERAL PROVISIONS. 14

14–101. 15

(A) IN THIS TITLE THE FOL LOWING WORDS HAVE TH E MEANINGS 16
INDICATED. 17

(B) “COMMERCIAL FINANCING” HAS THE MEANING STATED IN § 12–1601 OF 18
THE COMMERCIAL LAW ARTICLE. 19

(C) “COMMERCIAL FINANCING TRANSACTION” HAS THE MEANING STAT ED 20
IN § 12–1601 OF THE COMMERCIAL LAW ARTICLE. 21

(D) “CONTROL” MEANS: 22

(1) IF THE LICENSEE IS A CORPORATION: 23

(I) THE DIRECT OR INDIRECT OWNERSHIP OF AT LEAST 25% OF 24
THE VOTING SHARES OF THE LICENSEE; OR 25

(II) THE ABILITY TO ELECT A MAJORITY OF THE DIRECTORS OF 26
THE LICENSEE OR OTHERWISE EFFECT A CHANGE IN POLICY OF THE LICENSEE; OR 27

24 SENATE BILL 881

(2) IF THE LICENSEE IS NO T A CORPORATION , THE POSSESSION , 1
DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF 2
THE MANAGEMENT AND P OLICIES OF THE LICEN SEE WHETHER THROUGH 3
OWNERSHIP, BY CONTRACT, OR OTHERWISE. 4

(E) (1) “CONTROL PERSON ” MEANS A PERSON THAT HAS THE POWER , 5
DIRECTLY OR INDIRECT LY, TO CONTROL A LICENSEE OR AN APPLI CANT FOR A 6
LICENSE. 7

(2) “CONTROL PERSON” INCLUDES: 8

(I) A GENERAL PARTNER , AN OFFICER , A DIRECTOR , OR A 9
MEMBER OF A LICENSEE OR AN APPLICANT FOR A LICENSE OR AN INDIVIDUAL WHO 10
OCCUPIES A SIMILAR POSITION OR PERFORMS A SIMILAR FUNCTION; 11

(II) A PERSON THAT, DIRECTLY OR INDIRECTLY, HAS: 12

1. THE RIGHT TO VOTE AT LEAST 20% OF A CLASS OF 13
VOTING SECURITIES OF A LICENSEE OR AN APPLICANT FOR A LICENSE; OR 14

2. THE POWER TO SELL OR DIRECT THE SALE OF A T 15
LEAST 20% OF A CLASS OF VOTING SECURITIES OF A LICENSEE OR AN APP LICANT 16
FOR A LICENSE; AND 17

(III) IN THE CASE OF A PARTNERSHIP, A LIMITED PARTNERSHIP, 18
A LIMITED LIABILITY PARTNERSHIP, A LIMITED LIABILITY COMPANY, OR ANY OTHER 19
BUSINESS ENTITY, A PERSON THAT: 20

1. ON LIQUIDATION OR DISSOLUTION OF A LICENSEE OR 21
AN APPLICANT FOR A LICENSE, HAS THE RIGHT TO RECEIVE AT LEAST 20% OF THE 22
CAPITAL OF THE LICENSEE OR APPLICANT FOR A LICENSE; OR 23

2. HAS CONTRIBUTED AT LE AST 20% OF THE CAPITAL 24
OF A LICENSEE OR AN APPLICANT FOR A LICENSE. 25

(F) “LICENSE” MEANS A LICENSE ISSU ED IN ANY FORM BY TH E 26
COMMISSIONER UNDER THIS TITLE TO DO BUSINESS AS A PROVIDER, INCLUDING AS 27
PROVIDED THROUGH NMLS. 28

(G) “LICENSED LOCATION” MEANS ANY LOCATION LISTED BY THE LICENSEE 29
IN NMLS IN ACCORDANCE WITH THIS TITLE. 30

(H) “LICENSED NAME” MEANS: 31

SENATE BILL 881 25

(1) THE LICENSEE’S LEGAL NAME; AND 1

(2) ANY TRADE NAME USED BY THE LICENSEE IN ACCORDANCE WITH 2
§ 2–121 OF THIS ARTICLE. 3

(I) “LICENSEE” MEANS A PERSON LICEN SED BY THE COMMISSIONER 4
UNDER THIS TITLE TO DO BUSINESS AS A PROVIDER. 5

(J) “PROVIDER” HAS THE MEANING STAT ED IN § 12–1601 OF THE 6
COMMERCIAL LAW ARTICLE. 7

(K) “RECIPIENT” HAS THE MEANING STAT ED IN § 12–1601 OF THE 8
COMMERCIAL LAW ARTICLE. 9

(L) “UNIQUE IDENTIFIER ” MEANS A NUMBER OR AN OTHER IDENTIFIER 10
ASSIGNED BY NMLS. 11

14–102. 12

THE COMMISSIONER MAY USE THE INVESTIGATIVE AN D ENFORCEMENT 13
POWERS PROVIDED UNDER §§ 2–113 THROUGH 2–116 OF THIS ARTICLE TO ENFORCE 14
THIS TITLE. 15

SUBTITLE 2. LICENSING PROVISIONS. 16

14–201. 17

(A) ON OR AFTER JANUARY 1, 2027, A PERSON MAY NOT ENGAGE IN THE 18
BUSINESS OF COMMERCIAL FINANCING IF THE PERSON IS LOCATED IN THE STATE 19
UNLESS THE PERSON: 20

(1) IS LICENSED BY THE COMMISSIONER; OR 21

(2) IS EXEMPT FROM THE PROVISIONS OF TITLE 12, SUBTITLE 16 OF 22
THE COMMERCIAL LAW ARTICLE. 23

(B) EACH L ICENSEE OR APPLICANT FOR A LICENSE SHALL OBTAIN AND 24
MAINTAIN A VALID UNIQUE IDENTIFIER ISSUED BY NMLS ON FORMING AN ACCOUNT 25
WITH NMLS. 26

(C) AN APPLICANT FOR AN INITIAL LICENSE OR A LICENSE RENEWAL SHALL 27
APPLY FOR THE LICENSE OR RENEWAL THROUGH NMLS. 28

14–202. 29

26 SENATE BILL 881

TO QUALIFY FOR A LICE NSE, AN APPLICANT SHALL S ATISFY THE 1
COMMISSIONER THAT THE APPLICANT IS OF GOOD MORAL CHARACTER AND HAS 2
SUFFICIENT FINANCIAL RESPONSIBILITY, BUSINESS EXPERIENCE , AND GENERAL 3
FITNESS TO: 4

(1) ENGAGE IN THE BUSINESS OF COMMERCIAL FINANCING; 5

(2) WARRANT THE BELIEF THAT THE BUSINESS WILL BE CONDUCTED 6
LAWFULLY, HONESTLY, FAIRLY, AND EFFICIENTLY; AND 7

(3) COMMAND THE CONFIDENCE OF THE PUBLIC. 8

14–203. 9

(A) TO APPLY FOR A LICENSE UNDER THIS SUBTITLE, AN APPLICANT SHALL: 10

(1) COMPLETE, SIGN, AND SUBMIT TO THE COMMISSIONER AN 11
APPLICATION MADE UND ER OATH IN THE FORM AND IN ACCORDANCE WI TH THE 12
PROCESS THAT THE COMMISSIONER REQUIRES; AND 13

(2) PROVIDE ALL INFORMATI ON THAT THE COMMISSIONER 14
REQUESTS. 15

(B) AN APPLICANT FOR A LICENSE UNDER THIS SUBTITLE SHALL PROVIDE: 16

(1) (I) THE APPLICANT’S LEGAL NAME AND ANY TRADE NAME USED 17
BY THE APPLICANT IN ACCORDANCE WITH § 2–121 OF THIS ARTICLE; AND 18

(II) UNLESS THE APPLICANT IS AN INDIVIDUAL , THE NAME OF 19
EACH CONTROL PERSON; AND 20

(2) (I) THE ADDRESS OF THE PR INCIPAL EXECUTIVE OF FICE OF 21
THE APPLICANT; 22

(II) THE ADDRESS OF EACH A DDITIONAL LOCATION , IF ANY , 23
THAT: 24

1. THE GENERAL PUBLIC MA Y REASONABLY VIEW AS A 25
LOCATION THAT ENGAGE S IN THE BUSINESS OF COMMERCIAL FINANCING , 26
INCLUDING ANY LOCATI ON THAT INVESTIGATES RECIPIENT COMPLAINTS OR 27
DIRECTLY COMMUNICATE S WITH RECIPIENTS OR ALLY, ELECTRONICALLY, OR IN 28
WRITING; 29

SENATE BILL 881 27

2. HOUSES ANY CORE OPERATIONAL INFRASTRUCTURE 1
OF TECHNOLOGY SYSTEMS; 2

3. CONDUCTS ANY CORE MAN AGEMENT, INFORMATION 3
SECURITY AND TECHNOLOGY, RISK AND COMPLIANCE, OR FINANCE FUNCTIONS; OR 4

4. IS OTHERWISE REQUIRED TO BE LISTED IN NMLS BY 5
REGULATION ADOPTED BY THE COMMISSIONER; 6

(III) UNLESS THE APPLICANT IS AN INDIVIDUAL , THE ADDRESS 7
OF EACH CONTROL PERSON; AND 8

(IV) ANY OTHER INFORMATION THAT THE COMMISSIONER 9
REASONABLY REQUIRES. 10

(C) WITH THE APPLICATION , THE APPLICANT SHALL PAY TO THE 11
COMMISSIONER A NONREFUNDABLE LICENSE FEE OF $850. 12

(D) IN ADDITION TO THE LI CENSE FEE REQUIRED U NDER SUBSECTION (C) 13
OF THIS SECTION , AN APPLICANT FOR AN INITIAL LICENSE SHAL L PAY TO NMLS 14
THE FEE THAT NMLS IMPOSES TO PROCESS THE APPLICATION. 15

14–204. 16

(A) (1) THE REQUIREMENTS UNDE R ANY FEDERAL LAW AN D TITLE 4, 17
SUBTITLES 1 THROUGH 5 OF THE GENERAL PROVISIONS ARTICLE REGARDING THE 18
PRIVACY OR CONFIDENT IALITY OF INFORMATIO N OR MATERIAL PROVID ED TO 19
NMLS AND ANY PRIVILEGE AR ISING UNDER FEDERAL OR STATE LAW , INCLUDING 20
THE RULES OF ANY FEDERAL OR STATE COURT WITH RESPECT TO THE INFORMATION 21
OR MATERIAL , SHALL CONTINUE TO AP PLY TO THE INFORMATION O R MATERIAL 22
AFTER THE INFORMATION OR MATERIAL HAS BEEN DISCLOSED TO NMLS. 23

(2) THE INFORMATION AND M ATERIAL MAY BE SHARE D WITH ALL 24
STATE AND FEDERAL RE GULATORY OFFICIALS H AVING OVERSIGHT AUTH ORITY 25
OVER THE COMMERCIAL FINANCING INDUSTRY , INCLUDING THE FINANCIAL 26
CRIMES ENFORCEMENT NETWORK, WITHOUT THE LOSS OF PRIVILEGE OR THE LOSS 27
OF CONFIDENTIALITY P ROTECTIONS PROVIDED BY FEDERAL LAW OR TITLE 4, 28
SUBTITLES 1 THROUGH 5 OF THE GENERAL PROVISIONS ARTICLE. 29

(B) THE COMMISSIONER MAY ENTE R INTO INFORMATION –SHARING 30
AGREEMENTS WITH OTHER GOVERNMENT AGENCIES, THE CONFERENCE OF STATE 31
BANK SUPERVISORS, AND OTHER ASSOCIATIO NS REPRESENTING GOVE RNMENT 32
AGENCIES, INCLUDING THE FINANCIAL CRIMES ENFORCEMENT NETWORK. 33

28 SENATE BILL 881

(C) INFORMATION OR MATERI AL THAT IS SUBJECT TO A PRIVILE GE OR 1
CONFIDENTIALITY UNDER SUBSECTION (A) OF THIS SECTION MAY NOT BE SUBJECT 2
TO: 3

(1) DISCLOSURE UNDER ANY FEDERAL OR STATE LAW GOVERNING 4
THE DISCLOSURE TO TH E PUBLIC OF INFORMAT ION HELD BY AN OFFIC ER OR 5
AGENCY OF THE FEDERA L GOVERN MENT OR A STATE THAT HAS RECEIVED THE 6
INFORMATION OR MATERIAL; OR 7

(2) SUBPOENA, DISCOVERY, OR ADMISSION INTO EV IDENCE IN ANY 8
PRIVATE CIVIL ACTION OR ADMINISTRATIVE PR OCESS, UNLESS WITH RESPECT TO 9
ANY PRIVILEGE HELD B Y NMLS THE PERSON TO WHOM T HE INFORMA TION OR 10
MATERIAL PERTAINS WAIVES, IN WHOLE OR IN PART, THE PRIVILEGE. 11

(D) ANY PROVISIONS OF TITLE 4, SUBTITLES 1 THROUGH 5 OF THE 12
GENERAL PROVISIONS ARTICLE RELATING TO T HE DISCLOSURE OF ANY 13
INFORMATION OR MATERIAL DESCRIBED IN SUBSECTION (A) OF THIS SECTION THAT 14
ARE INCONSISTENT WITH SUBSECTION (A) OF THIS SECTION SHALL BE SUPERSEDED 15
BY THE REQUIREMENTS OF THIS SECTION. 16

(E) THIS SECTION DOES NOT APPLY TO INFORMATION OR MATERIAL 17
RELATING TO PUBLICLY ADJUDICATED DISCIPLINARY AND ENFORCEMENT ACTIONS 18
AGAINST A PROVIDER THAT IS INCLUDED IN NMLS AND DESIGNATED FOR ACCESS 19
BY THE PUBLIC. 20

14–205. 21

(A) AFTER THE FILING OF A COMPLETE APPLICATION, THE COMMISSIONER 22
SHALL INVESTIGATE TH E FINANCIAL RESPONSI BILITY, BUSINESS EXPERIENCE , 23
CHARACTER, AND GENERAL FITNESS OF THE APPLICANT. 24

(B) (1) UNLESS THE COMMISSIONER NOTIFIES THE APPLICANT THAT A 25
DIFFERENT TIME PERIOD IS NECESSARY, THE COMMISSIONER SHALL APPROVE OR 26
DENY EACH APPLICATIO N FOR A LICENSE WITH IN 60 DAYS AFTER THE DATE A 27
COMPLETE APPLICATION IS FILED. 28

(2) THE APPLICANT MAY BY WRITTEN REQUEST TO T HE 29
COMMISSIONER WITHDRAW THE APPLICATION AT ANY TIME BEFORE THE ISSUANCE 30
OF THE LICENSE. 31

(C) THE COMMISSIONER SHALL ISSUE A LICENSE TO ANY APPLICANT WHO 32
MEETS THE REQUIREMENTS OF THIS SUBTITLE. 33

SENATE BILL 881 29

(D) (1) IF AN APPLICANT DOES NOT M EET THE REQUIREMENTS OF THIS 1
SUBTITLE, THE COMMISSIONER SHALL: 2

(I) NOTIFY THE APPLICANT IMMEDIATELY OF THIS FACT; AND 3

(II) SUBJECT TO THE HEARIN G PROVISIONS OF § 14–211 OF 4
THIS SUBTITLE, DENY THE APPLICATION. 5

(2) WITHIN 30 DAYS AFTER THE COMMISSIONER DENIES A N 6
APPLICATION, THE COMMISSIONER SHALL STATE THE REASONS FOR THE DENIAL IN 7
WRITING AND MAIL THEM TO THE ADDRESS LISTED IN THE APPLICATION. 8

14–206. 9

(A) INFORMATION IN NMLS ASSOCIATED WITH A LI CENSE APPROVED BY 10
THE COMMISSIONER UNDER THIS SUBTITLE SHALL INCLUDE THE FOLLOWING: 11

(1) THE LICENSEE ’S LEGAL NAME AND ANY TRADE NAME USED BY 12
THE LICENSEE IN ACCORDANCE WITH § 2–121 OF THIS ARTICLE; 13

(2) THE ADDRESS OF THE LI CENSEE’S PRINCIPAL EXECUTIV E 14
OFFICE; AND 15

(3) THE ADDRESS OF EACH A DDITIONAL LOCATION, IF ANY, WHERE 16
THE LICENSEE DOES BUSINESS AND THAT: 17

(I) THE GENERAL PUBLIC MA Y REASONABLY VIEW AS A 18
LOCATION THAT OFFERS COMMERCIAL FINANCING , INCLUDING ANY LOCATI ON 19
THAT INVESTIGATES RECIPIENT COMPLAINTS OR DIRECTLY COMMUNICATES WITH 20
RECIPIENTS ORALLY, ELECTRONICALLY, OR IN WRITING; 21

(II) HOUSES ANY CORE OPERA TIONAL INFRASTRUCTUR E OR 22
TECHNOLOGY SYSTEMS; 23

(III) CONDUCTS ANY CORE MAN AGEMENT, INFORMATION 24
SECURITY AND TECHNOLOGY, RISK AND COMPLIANCE, OR FINANCE FUNCTIONS; OR 25

(IV) IS OTHERWISE REQUIRED TO BE LISTED IN NMLS BY 26
REGULATION ADOPTED BY THE COMMISSIONER. 27

(B) A LICENSEE SHALL MAINT AIN AND UPDATE THE I NFORMATION IN 28
NMLS ASSOCIATED WITH THE LICENSEE’S LICENSE TO REFLECT ACCURATELY AT 29
ALL TIMES THE INFORMATION REQUIRED BY SUBSECTION (A) OF THIS SECTION. 30

30 SENATE BILL 881

(C) THE UNIQUE IDENTIFIER ASSIGNED BY NMLS TO A LICENSEE SHALL 1
CONSTITUTE THE LICENSEE’S LICENSE NUMBER. 2

(D) A LICENSE AUTHORIZES T HE LICENSEE TO DO BU SINESS UNDER THE 3
LICENSE AT ANY LICENSED LOCATION AND UNDER ANY LICENSED NAME. 4

(E) A LICENSE MAY NOT BE TRANSFERRED OR ASSIGNED. 5

(F) EACH LICENSEE SHALL C ONSPICUOUSLY DISPLAY THE FOLLOWING 6
INFORMATION ON THE L ICENSEE’S WEBSITE , ANY SOFTWARE APPLICA TION 7
ACCESSIBLE TO THE PUBLIC AND USED TO PROVIDE COMMERCIAL FINANCING, AND 8
THE PROFILE PAGE WITHIN EACH SOCIAL MEDIA PLATFORM THE LICENSEE USES: 9

(1) THE LICENSEE’S UNIQUE IDENTIFIER; AND 10

(2) A LINK TO THE NMLS CONSUMER ACCESS WEBSITE. 11

14–207. 12

(A) SUBJECT TO ANY REGULA TION ADOPTED BY THE COMMISSIONER, AN 13
INITIAL LICENSE TERM SHALL: 14

(1) BEGIN ON THE DAY THE LICENSE IS ISSUED; AND 15

(2) EXPIRE AT THE END OF DECEMBER 31 OF THE YEAR: 16

(I) THE LICENSE IS ISSUED, IF THE LICENSE IS ISSUED BEFORE 17
NOVEMBER 1; OR 18

(II) SUCCEEDING THE YEAR T HAT THE LICENSE IS ISSUE D, IF 19
THE LICENSE IS ISSUED ON OR AFTER NOVEMBER 1. 20

(B) ON OR AFTER NOVEMBER 1 EACH YEAR, A LICENSE MAY BE REN EWED 21
FOR A 1–YEAR TERM IF THE LICENSEE: 22

(1) OTHERWISE IS ENTITLED TO BE LICENSED; 23

(2) PAYS TO THE COMMISSIONER A NONREFUNDABLE RENEWAL FEE 24
OF $850; AND 25

(3) SUBMITS TO THE COMMISSIONER: 26

(I) A RENEWAL APPLICATION IN THE FORM AND IN 27
ACCORDANCE WITH THE PROCESS THAT THE COMMISSIONER REQUIRES; AND 28

SENATE BILL 881 31

(II) ANY OTHER INFORMATION THAT THE COMMISSIONER 1
REASONABLY REQUIRES TO DETERMINE THAT TH E RENEWAL APPLICANT 2
CONTINUES TO BE ELIGIBLE TO BE LICENSED. 3

(C) IN ADDITION TO THE LI CENSE RENEWAL FEE RE QUIRED UNDER 4
SUBSECTION (B)(2) OF THIS SECTION , AN APPLICANT FOR A L ICENSE RENEWAL 5
SHALL PAY TO NMLS THE FEE THAT NMLS IMPOSES T O PROCESS THE 6
APPLICATION. 7

14–208. 8

(A) (1) A LICENSEE MAY NOT ADD , DELETE, OR MODIFY A LOCATION 9
REQUIRED TO BE LISTED IN NMLS UNDER § 14–206 OF THIS SUBTITLE UNLESS: 10

(I) THE LICENSEE PROVIDES TO THE COMMISSIONER, 11
THROUGH NMLS AND IN ACCORDANCE WITH ANY REGULATIONS ADOPTED BY THE 12
COMMISSIONER, NOTICE OF THE ADDITION, DELETION, OR MODIFICATION; 13

(II) THE ADDITION , DELETION, OR MODIFICATION OF T HE 14
LOCATION IS RECORDED WITH THE INFORMATION ASSOCIATED WITH THE 15
LICENSEE’S LICENSE IN NMLS; AND 16

(III) THE ADDITION , DELETION, OR MODIFICATION OF T HE 17
LOCATION OTHERWISE COMPLIES WITH THIS SUBTITLE. 18

(2) THE LICENSEE MAY NOT DO BUSINESS AT A LOCATION REQUIRED 19
TO BE LISTED IN NMLS UNDER § 14–206 OF THIS SUBTITLE UNTIL THE LOCATION 20
IS RECORDED WITH THE INFORMATION ASSOCIATED WITH THE LICENSEE’S LICENSE 21
IN NMLS. 22

(B) A LICENSEE MAY NOT UND ERGO A CHANGE IN CON TROL UNLESS THE 23
LICENSEE NOTIFIES TH E COMMISSIONER THROUGH NMLS OF THE PROPOSED 24
CHANGE. 25

14–209. 26

(A) (1) A LICENSEE MAY SURREND ER A LICENSE THROUGH NMLS IN 27
ACCORDANCE WITH THE PROCESS THAT THE COMMISSIONER REQUIRES. 28

(2) WITH THE SURRENDER OF A LICENSE , A LICENSEE SHALL 29
PROVIDE: 30

(I) THE REASON FOR THE LICENSE SURRENDER; AND 31

32 SENATE BILL 881

(II) A LIST OF ALL THE LICE NSEE’S OUTSTANDING 1
COMMERCIAL FINANCING TRANSACTIONS. 2

(B) THE SURRENDER OF A LICENSE DOES NOT: 3

(1) AFFECT ANY CIVIL OR CRIMINAL LIABILITY OF THE LICENSEE FOR 4
ACTS COMMITTED BEFORE THE LICENSE IS SURRENDERED; OR 5

(2) ENTITLE THE LICENSEE TO THE RETURN OF ANY PART OF ANY FEE 6
PAID TO THE COMMISSIONER. 7

14–210. 8

SUBJECT TO THE HEARING PROVISIONS OF § 14–211 OF THIS SUBTITLE, THE 9
COMMISSIONER MAY SUSPEND OR REVOKE THE LI CENSE OF ANY LICENSEE IF THE 10
LICENSEE OR ANY OWNER, DIRECTOR, OFFICER, MEMBER, COVENTURER, PARTNER, 11
STOCKHOLDER, EMPLOYEE, OR AGENT OF THE LICENSEE: 12

(1) MAKES ANY MATERIAL MISSTATEMENT IN AN APPLICATION FOR A 13
LICENSE; 14

(2) CONDUCTS THE BUSINESS OF COMMERCIAL FINANC ING IN AN 15
UNSAFE OR UNSOUND MANNER; 16

(3) REFUSES TO ALLOW THE COMMISSIONER TO MAKE AN 17
INVESTIGATION AUTHORIZED BY ANY LAW; 18

(4) WILLFULLY FAILS TO MA KE A REPORT REQUIRED UNDER ANY 19
LAW; 20

(5) IS CONVICTED UNDER TH E LAWS OF THE UNITED STATES OR OF 21
ANY STATE OF: 22

(I) A FELONY; OR 23

(II) A MISDEMEANOR THAT IS DIRECTLY RELATED TO THE 24
FITNESS AND QUALIFIC ATION OF THE PERSON TO ENG AGE IN THE BUSINESS OF 25
COMMERCIAL FINANCING; 26

(6) IN CONNECTION WITH AN Y COMMERCIAL FINANCI NG 27
TRANSACTION: 28

(I) COMMITS ANY FRAUD; 29

SENATE BILL 881 33

(II) ENGAGES IN ANY ILLEGAL OR DISHONEST ACTIVITY; OR 1

(III) MISREPRESENTS OR FAIL S TO DISCLOSE ANY MATERIA L 2
FACTS TO A GOVERNMENT AGENCY OR UNIT; 3

(7) VIOLATES ANY PROVISION OF: 4

(I) THIS SUBTITLE OR ANY RULE OR REGULATION A DOPTED 5
UNDER THIS SUBTITLE; 6

(II) TITLE 12, SUBTITLE 16 OF THE COMMERCIAL LAW 7
ARTICLE OR ANY RULE O R REGULATION ADOPTED UNDER TITLE 12, SUBTITLE 16 8
OF THE COMMERCIAL LAW ARTICLE; OR 9

(III) ANY OTHER LAW REGULAT ING THE BUSINESS OF 10
COMMERCIAL FINANCING; 11

(8) BECOMES INSOLVENT; 12

(9) HAS SUSPENDED PAYMENT OF THE LICENSEE ’S OBLIGATIONS , 13
MADE AN ASSIGNMENT F OR TH E BENEFIT OF THE LIC ENSEE’S CREDITORS , OR 14
ADMITTED INABILITY TO PAY THE LICENSEE ’S DEBTS AS THE DEBTS BECOME DUE; 15
OR 16

(10) HAS APPLIED FOR AN AD JUDICATION OF BANKRU PTCY, 17
REORGANIZATION, ARRANGEMENT, OR OTHER RELIEF UNDE R ANY BANKRUPTCY 18
PROCEEDING. 19

14–211. 20

(A) BEFORE THE COMMISSIONER DENIES AN APPLICATION FOR A LICENSE 21
UNDER § 14–205 OF THIS SUBTITLE OR TAKES ANY ACTION UNDER § 14–210 OF THIS 22
SUBTITLE, THE COMMISSIONER SHALL GI VE THE APPLICANT OR LICENSEE AN 23
OPPORTUNITY FOR A HEARING. 24

(B) NOTICE OF THE HEARING SHALL BE GIVEN AND THE HEARING SHALL BE 25
HELD IN ACCORDANCE W ITH TITLE 10, SUBTITLE 2 OF THE STATE GOVERNMENT 26
ARTICLE. 27

(C) FOR A HEARING ON THE PROPOSED SUSPENSION OR REVOCATION OF A 28
LICENSE, THE HEARING NOTICE TO BE GIVEN TO THE LICENSEE SHALL BE SENT BY 29
REGISTERED OR CERTIFIED MAIL AT LEAST 15 DAYS BEFORE THE HEARING TO THE 30
PLACE OF BUSINESS STATED IN THE LICENSE. 31

34 SENATE BILL 881

14–212. 1

THE STATE’S ATTORNEY FOR THE COUNTY IN WHICH THE VIOLATION OCCURS 2
OR THE ATTORNEY GENERAL MAY PROSECUTE ANY VIOLATION OF THIS SUBTITLE. 3

14–213. 4

A PERSON WHO VIOLATES ANY PROVISION OF THIS SUBTITLE IS GUILTY OF A 5
MISDEMEANOR AND ON CONVICTION IS SUBJECT TO A FINE NOT EXCEEDING $5,000 6
OR IMPRISONMENT NOT EXCEEDING 3 YEARS OR BOTH. 7

SECTION 2. AND BE IT FURTHER ENACTED, Tha t this Act shall take effect 8
October 1, 2026. 9

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.