The bill, titled "An Act relating to disclosures for certain commercial sales-based financing transactions and the registration of commercial sales-based financing brokers," introduces a new Chapter 398 to the Finance Code of Texas. This chapter establishes definitions for key terms related to commercial sales-based financing, such as "commercial sales-based financing broker," "disbursement amount," and "finance charge." It outlines the requirements for disclosures that providers must make to recipients when extending financing over $500,000, including details about the total amount, finance charges, repayment amounts, and any additional fees. The bill also mandates that commercial sales-based financing brokers must register with the Texas Department of Banking and pay a registration fee, with specific rules to be set by the Finance Commission of Texas.

Additionally, the bill imposes civil penalties for violations of its provisions, with fines of up to $10,000 per violation, capped at $100,000 for aggregated violations. It classifies violations as deceptive trade practices under existing law, allowing for enforcement actions. The bill also clarifies that it does not create a private right of action for individuals against others based on compliance with its terms. The act is set to take effect on September 1, 2025, with a registration deadline for existing brokers by January 1, 2026, and a requirement for the Finance Commission to establish necessary rules by December 1, 2025.

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