Texas OCC progress with HB 700 rules
Recent information on the formulation of rules from the Texas OCC regarding HB 700 makes it sound like ONLY first position Sales Based Financing transactions will be legal once they are done finalizing the rules. The key provision about prohibiting automatic debits is the key. Discussions recently suggest that either a Provider will need a first lien UCC, or the second option of needing a DACA-Deposit Account Control Agreement, which is much more difficult to obtain.
So either one leads to just first positions. Funders should be aware of these developments and stay in tune with updates as they become public.
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