Last night, Vermont Governor Phil Scott signed HB 648 into law.
From the RBFC: "As a reminder, the language below was added in the final stages of the legislative process to a larger financial services bill without giving the industry an opportunity to weigh in or educate the legislature.
House Bill 648 will impose the following requirements on factoring and sales-based financing providers and brokers effective July 1, 2027:
Providers of factoring and/or sales-based financing must obtain a "lender" license;
Brokers, lead generators, and anyone that advertises factoring and/or sales-based financing online or via direct mail or telephone must obtain a "loan solicitation license"; and
Providers of factoring and/or sales-based financing must provide cost disclosures including "APR," similar to disclosure requirements in California and New York.
The Vermont bill also copies a controversial section of a recent Texas law, 2025 TX H.B. 700. If enacted, the Vermont bill prohibits a provider of factoring and/or sales-based financing from establishing "a mechanism for automatically debiting a recipient's deposit account" unless the provider holds a validly perfected security interest in the "recipient's account" as defined in Article 9 of the UCC, with a first priority against the claims of all other persons. The Texas law impacts only providers of sales-based financing. It appears that the Vermont legislature used the Texas law as a blueprint to target both factoring and sales-based financing."
