The bill, titled "Commercial Sales-Based Financing," introduces a new chapter to the Texas Finance Code, specifically Chapter 398, which establishes regulations for commercial sales-based financing transactions and the registration of brokers involved in such transactions. It defines key terms related to commercial sales-based financing, including "provider," "recipient," and "finance charge," and outlines the disclosure requirements that providers must adhere to when extending financing offers exceeding $500,000. These disclosures include details about the total financing amount, disbursement amount, finance charges, repayment amounts, and any additional fees or collateral requirements.

Furthermore, the bill mandates that individuals wishing to operate as commercial sales-based financing brokers must register with the Texas Department of Banking, with specific requirements for registration and renewal. It also establishes civil penalties for violations of the chapter, categorizing such violations as deceptive trade practices under existing law. The bill is set to take effect on September 1, 2025, with provisions for existing brokers to register by January 1, 2026, and for the Finance Commission of Texas to establish necessary rules and fees by December 1, 2025.

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