H.B. No. 700 introduces Chapter 398 to the Texas Finance Code, establishing new regulations for commercial sales-based financing transactions. The chapter defines essential terms such as "commercial sales-based financing," "provider," "recipient," and "finance charge," and clarifies that these transactions are not classified as account purchase transactions under current law. It outlines the applicability of the chapter to providers and brokers offering financing services online while exempting certain entities like banks and credit unions. The bill mandates that providers disclose key information for financing offers under $1 million, including total amounts, finance charges, and repayment terms, and requires them to register with the Office of Consumer Credit Commissioner.

Additionally, the bill imposes registration and renewal fees for brokers and providers, necessitating specific information on the registration form, such as business details and any legal judgments. It declares that contracts with confession of judgment provisions are void and prohibits automatic debits from recipients' accounts unless a valid security interest is held. Violations can incur civil penalties of $10,000 per instance, but the bill does not grant individuals a private right of action. Existing brokers and providers must complete their registration by December 31, 2026, with the act taking effect on September 1, 2025.

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