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Bill

LC 4263

Generally revise laws pertaining to disclosure requirements for new construction lenders

2025 Regular Session

LC 4263 would strengthen and revise disclosure rules for new construction lenders, boosting transparency for borrowers and adding compliance duties for lenders.

(LC) Draft Died in Process
#financialinstitutions(seealso:credittransactions) #taxation(generally)
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Bill Summary · LC 4263

Summary: LC 4263 — Generally revise laws pertaining to disclosure requirements for new construction lenders

Overview

  • Bill Number: LC 4263
  • Title: Generally revise laws pertaining to disclosure requirements for new construction lenders
  • Status: Draft; Died in Process (as of 2025-05-22)
  • Introduced: January 6, 2025
  • Classification: bill
  • Subject: Financial Institutions (Credit Transactions), Taxation (Generally)

Purpose and Intent

  • Based on the title, LC 4263 seeks to revise and update the disclosure requirements applicable to lenders that provide financing for new construction. The objective is presumably to improve transparency for borrowers and ensure lenders disclose essential loan terms, costs, and risks associated with construction financing.
  • The exact statutory modifications, definitions, and required disclosures are not provided in the summary available here.

Scope and Potential Provisions (not specified in the provided text)

  • The precise provisions are not listed. If enacted, typical areas such a bill might address could include:
    • Required disclosures of loan terms (amount, interest rate, annual percentage rate, repayment schedule)
    • itemization of fees and closing costs
    • disclosure of draw schedules, draw conditions, and potential changes to funding
    • disclosure of risk factors, project delays, and remediation responsibilities
    • prepayment rights, penalties, and escalation clauses
    • timelines for underwriting, appraisals, and project milestones
    • enforcement mechanisms and penalties for noncompliance
    • effective date and any transition provisions
  • Note: These are common topics in construction-lending disclosure regimes and are provided for context only, not as confirmed text from LC 4263.

Affected Parties

  • New construction lenders and loan originators
  • Borrowers seeking construction financing (developers, homebuilders, and property owners)
  • Real estate professionals, mortgage brokers, and settlement agents
  • Regulatory and compliance staff within financial institutions

Procedural Status and Timeline

  • 2025-01-06: Drafter Assigned
  • 2025-02-15: Draft On Hold (listed twice on that date)
  • 2025-05-22: Draft Died in Process
  • Current status indicates the bill did not advance and no further legislative action is recorded in the provided data.

Potential Impacts if Enacted

  • If LC 4263 were enacted, borrowers might experience greater clarity and transparency in construction financing disclosures.
  • Lenders could face new compliance requirements, potential costs for updating disclosures, training, and system changes.
  • Real estate transactions involving new construction could be affected by clearer terms and risk disclosures, potentially influencing decision-making and closing timelines.

Next Steps (for stakeholders)

  • Monitor for any reintroduction or related bills that address construction-lending disclosures.
  • If interest exists, review the bill’s text upon reintroduction to understand exact disclosures, definitions, and compliance timelines.
  • Consider preparing comments or proposals to align with current disclosure practices and borrower protections.

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

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