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HB 693

Commercial Financing - Small Business Truth in Lending Act

2025 Regular Session Introduced by David Fraser-Hidalgo

Maryland bill requires commercial lenders to provide standardized truth-in-lending disclosures for small business loans, increasing transparency but potentially raising lender compliance costs.

Motion Special Order until 04/07 (Delegate Crosby) Adopted
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Bill Summary · HB 693

Legislative bill overview

HB 693 extends truth-in-lending protections to small business commercial financing by requiring lenders to disclose key terms like interest rates, fees, and repayment schedules in standardized formats. Currently, federal truth-in-lending laws primarily protect consumers in personal finance but largely exempt commercial transactions. This bill would create transparency requirements specifically for small business loans in Maryland.

Why is this important

Small businesses often lack the financial sophistication and negotiating power of larger corporations, making them vulnerable to unclear or predatory lending terms. Enhanced disclosure requirements could help small business owners make informed borrowing decisions and compare loan offers more effectively. This addresses a genuine market information gap that can lead to unexpected costs or unfavorable terms for entrepreneurs.

Potential points of contention

  • Lender compliance costs: Banks and alternative lenders argue that standardized disclosure requirements increase administrative burden and compliance costs, which may be passed to borrowers or reduce lending availability
  • Definition of "small business": Determining size thresholds (employee count, revenue, net worth) will affect how many businesses qualify and whether the protections are appropriately targeted
  • Competitive disadvantage: Maryland lenders could face higher costs than out-of-state competitors, potentially driving some lending activity to other jurisdictions or to less-regulated alternative lenders

Compiled from official sources — confirm details with the bill’s official record.

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