WeVote
Log In

Bill

Bill

HB 3477

SM BUS FINANCING TRANSPARENCY

104th Regular Session Introduced by Dee Avelar

The bill requires clear disclosures, registration, and regulatory oversight for non-bank commercial financing to Illinois small businesses, with penalties for violations.

Rule 19(a) / Re-referred to Rules Committee
0
WeVote Research Nonpartisan
Bill Summary · HB 3477

Summary — HB 3477: Small Business Financing Transparency Act

Status: Rule 19(a) / Re‑referred to Rules Committee (Received from House 2025-05-09)
Introduced: Feb 18, 2025 (Rep. Dagmara Avelar) — Effective immediately if enacted
Statutory citations created/changed: adds 5 ILCS 140/7.5; creates 815 ILCS 505/2HHHH (new)

Purpose

HB 3477, titled the Small Business Financing Transparency Act, is intended to protect small businesses by increasing required disclosures, registration, and regulatory oversight of commercial financing products marketed to Illinois businesses (including sales‑based financing, closed‑end and open‑end commercial loans, factoring transactions, renewal financing, and other commercial financing arrangements).

Key provisions

  • Disclosure requirements: Requires providers of commercial financing to give clear, conspicuous disclosures tailored to product type (sales‑based financing, closed‑end, open‑end, factoring, renewal financing, etc.). Disclosures must include a statement on how to file a complaint with the Illinois Department of Financial and Professional Regulation (Department).
  • Definitions: Defines critical terms such as “commercial financing,” “provider,” “broker,” “recipient,” “sales‑based financing,” “factoring transaction,” “finance charge,” “closed‑end financing,” and “open‑end financing.”
  • Registration and brokers: The bill contemplates a registration regime (defines “applicant” and “advance fee”), and treats brokers who obtain commercial financing offers for compensation. (Text includes definitions and registration-related language.)
  • Enforcement powers: The Department (and Secretary) may adopt rules, investigate and examine providers/brokers, issue cease‑and‑desist orders and seek injunctions, and bring civil actions for violations.
  • Civil penalties: Upon a finding of violation, the Secretary may order civil penalties up to $10,000 per violation; if a violation is willful, up to $20,000 per violation.
  • Consumer‑protection integration: Violations under the Act are declared unlawful practices under the Illinois Consumer Fraud and Deceptive Business Practices Act; the bill makes conforming changes to that Act.
  • Exemptions: “Provider” expressly excludes banks, federal or state‑chartered savings banks, savings & loan associations, credit unions, entities regulated under the Farm Credit Act, and certain technology service providers acting on their behalf.

Who is affected

  • Directly affected: Small business recipients in Illinois and commercial financing providers and brokers offering targeted financing products to Illinois businesses (including alternative finance companies, factoring firms, and sales‑based lenders).
  • Largely excluded: Traditional depository institutions and specified federally regulated lenders and certain technology vendors.

Procedural/timeline highlights

  • Filed/Introduced in House: Feb 2025 (Rep. Dagmara Avelar)
  • Committee activity: Referred to Rules Committee; assigned to Financial Institutions & Licensing Committee (March 11); reported favorably and placed on calendars in March/April; public hearing held April 15.
  • House floor: Amended and passed (as amended) on May 8, 2025; received by the Senate on May 9, 2025.
  • Current status: Re‑referred under Senate Rule 19(a) to the Senate Rules Committee.

Potential impact

HB 3477 would increase transparency and regulatory oversight of non‑bank commercial financing products sold to Illinois small businesses, impose standardized disclosures and complaint‑notice requirements, and subject violators to administrative penalties and consumer‑protection enforcement. The bill targets alternative financing arrangements that often lack uniform disclosure standards, while maintaining exemptions for traditional regulated depository institutions.

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

Sign in to ask a question.