The bill, H.B. No. 700, introduces new regulations for commercial sales-based financing transactions in Texas by adding Chapter 398 to the Finance Code. It defines key terms related to commercial sales-based financing, including "commercial sales-based financing broker," "disbursement amount," and "finance charge." The bill mandates that providers disclose specific information to recipients when extending financing offers exceeding $500,000, such as the total financing amount, disbursement amount, finance charge, total repayment amount, and any additional fees. It also requires brokers to register with the Texas Department of Banking and outlines the registration process, including the payment of fees and the need for annual renewal.

Additionally, the bill establishes civil penalties for violations, with fines 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 based on compliance with its provisions. The effective date for the registration requirement is set for January 1, 2026, and the Finance Commission of Texas is tasked with adopting necessary rules by December 1, 2025. The overall aim of the bill is to enhance transparency and accountability in commercial sales-based financing transactions.

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