HB 639 — An Act amending the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law, in preliminary provisions, further providing for definitions; and, in protective provisions, providing for truth in lending.

PRINTER'S NO.   649

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 639
                                               Session of
                                                 2025

     INTRODUCED BY HOWARD, WAXMAN, NEILSON, KHAN, GIRAL, HILL-EVANS,
        PIELLI, MADDEN AND SANCHEZ, FEBRUARY 20, 2025

     REFERRED TO COMMITTEE ON COMMERCE, FEBRUARY 20, 2025


                                    AN ACT
 1   Amending the act of January 30, 1974 (P.L.13, No.6), entitled
 2      "An act regulating agreements for the loan or use of money;
 3      establishing a maximum lawful interest rate in the
 4      Commonwealth; providing for a legal rate of interest;
 5      detailing exceptions to the maximum lawful interest rate for
 6      residential mortgages and for any loans in the principal
 7      amount of more than fifty thousand dollars and Federally
 8      insured or guaranteed loans and unsecured, noncollateralized
 9      loans in excess of thirty-five thousand dollars and business
10      loans in excess of ten thousand dollars; providing
11      protections to debtors to whom loans are made including the
12      provision for disclosure of facts relevant to the making of
13      residential mortgages, providing for notice of intention to
14      foreclose and establishment of a right to cure defaults on
15      residential mortgage obligations, provision for the payment
16      of attorney's fees with regard to residential mortgage
17      obligations and providing for certain interest rates by banks
18      and bank and trust companies; clarifying the substantive law
19      on the filing of and execution on a confessed judgment;
20      prohibiting waiver of provisions of this act, specifying
21      powers and duties of the Secretary of Banking, and
22      establishing remedies and providing penalties for violations
23      of this act," in preliminary provisions, further providing
24      for definitions; and, in protective provisions, providing for
25      truth in lending.
26      The General Assembly of the Commonwealth of Pennsylvania
27   hereby enacts as follows:
28      Section 1.    Section 101 of the act of January 30, 1974
29   (P.L.13, No.6), referred to as the Loan Interest and Protection
 1   Law, is amended by adding definitions to read:
 2      Section 101.    Definitions.--As used in this act:
 3      * * *
 4      "Provider" means:
 5      (a)   A person who extends a specific offer of commercial
 6   financing to a recipient.
 7      (b)   A nondepository institution that enters into a written
 8   agreement with a depository institution to arrange for the
 9   extension of commercial financing by the depository institution
10   to a recipient via an online lending platform administered by
11   the nondepository institution.
12      * * *
13      "Small business" means a business of fewer than five hundred
14   (500) employees that is presented a specific commercial
15   financing offer by a provider.
16      Section 2.   The act is amended by adding a section to read:
17      Section 407.1.   Truth in Lending.--A provider subject to this
18   act shall disclose the following information, if applicable, to
19   a small business at the time of executing a specific commercial
20   financing offer and shall obtain a signature of the small
21   business's agent for each disclosure before executing the
22   commercial financing transaction:
23      (1)   The total amount of funds provided.
24      (2)   The total dollar cost of the financing.
25      (3)   The term or estimated term.
26      (4)   The method, frequency and amount of each payment.
27      (5)   A description of prepayment policies.
28      (6)   The total cost of the financing expressed as an
29   annualized rate.
30      Section 3.   This act shall take effect in 60 days.

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