,i  #aaf? ,,congress  #b;d ,session  ,h4
 ,r4 #ghhi  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #cj1 #bjbj,ms4  
,velzquez introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,f9ancial    
,s]vices  ,a ,,bill  ,to apply ! ,tru? 9
 ,l5d+ ,act to small bus9ess f9anc+1 to 
regulate brok]s & require ! lic5s+ (    
brok]s1 & = o!r purposes4  #a4 ,%ort    
title ,?is ,act may be cit$ z ! ,small  
,bus9ess ,l5d+ ,disclosure & ,brok]     
,regulation ,act ( #bjbj4  ,i ,small    
,bus9ess ,f9anc+  #aja4 ,application ( !
 ,tru? 9 ,l5d+ to small bus9ess f9anc+  
7a7 ,9 g5]al ,! ,tru? 9 ,l5d+ ,act 7#ae 
,u4,s4,c4 #afja et seq47 is am5d$ by    
add+ at ! end ! foll[+3  #f ,small      
,bus9ess ,f9anc+  #aia4 ,def9itions4    
#aib4 ,application ( ?is title to small 
bus9ess f9anc+4 #aic4 ,additional       
disclosures4 #aid4 ,re/rictions on      
d\ble-dipp+4 #aie4 ,additional          
provisions4  #aia4 ,def9itions ,9 ?is   
*apt]3 7#a7 ,clos$-end comm]cial cr$it  
,! t]m clos$-end comm]cial cr$it-- 7,a7 

means a clos$-end ext5sion ( cr$it1     
secur$ or unsecur$1 includ+ f9anc+ ) an 
e/abli%$ pr9cipal am\nt & includ+       
equipm5t f9anc+ t does n meet !         
def9ition ( a lease "u ! ,uni=m         
,comm]cial ,code 7,u4,c4,c4--           
#b;,a-#ajc7;j77 ! proce$s ( :i* !       
recipi5t does n int5d to use prim>ily = 
p]sonal1 family or h\sehold purposes2 & 
7,b7 includes f9anc+ ) an e/abli%$      
pr9cipal am\nt & duration4  7#b7        
,consum] f9ancial product or s]vice ,!  
t]m consum] f9ancial product or s]vice  
has ! mean+ giv5 t t]m "u section #ajjb 
( ! ,consum] ,f9ancial ,protection ,act 
( #bjaj4  7#c7 ,director ,! t]m         
,director means ! ,director ( ! ,bureau4
  7#d7 ,factor+ ,! t]m factor+ means a  
transaction t includes an agreem5t to   
pur*ase1 transf]1 or sell a legally     
en=ceable claim = paym5t held by a      
recipi5t = goods ! recipi5t has suppli$ 
or s]vices ! recipi5t has r5d]$ t h be5 
ord]$ b = :i* paym5t has n yet be5 made4
  7#e7 ,f9ance *>ge  7,a7 ,9 g5]al ,!   

t]m f9ance *>ge means ! co/ ( f9anc+ z a
 doll> am\nt1 & includes any *>ge       
payable directly or indirectly by !     
recipi5t ( ! f9anc+ & impos$ directly or
 indirectly by ! provid] ( ! f9anc+ z an
 incid5t to or a condition ( ! ext5sion 
( f9anc+4  7,b7 ,calculation 9 op5-end  
comm]cial cr$it plans ,9 any op5-end    
comm]cial cr$it plan1 ! f9ance *>ge %all
 be comput$ assum+ ! maximum am\nt (    
cr$it available to ! recipi5t1 9 ea*    
case1 is drawn & repaid at ! m9imum     
rate4  7,c7 ,calculation 9 factor+      
transactions ,9 any factor+ transaction1
 ! f9ance *>ge %all include ! disc\nt   
tak5 on ! face value ( ! acc\nts        
receivable4  7,d7 ,calculation 9 lease  
f9anc+ transactions ,9 any lease f9anc+ 
transaction1 ! f9ance *>ge %all include 
! sum ( ! lease paym5ts &1 if !re is a  
fix$-price pur*ase option or a pur*ase  
option ) a price t c be calculat$ at !  
"t ( disclosure1 ! pur*ase price li/$ 9 
! contract t ! lessee may pay to acquire
 ! leas$ goods at ! end ( ! lease1      

m9us-- 7i7 if ! f9ance company selects1 
manufactures1 or supplies ! goods to be 
leas$1 ! price t ! f9ance company w\ld  
sell ! goods 9 a ca% transaction2 or    
7ii7 if ! f9ance company does n select1 
manufacture1 or supply ! goods to be    
leas$1 ! price ! f9ance company w pay to
 acquire ! prop]ty to be leas$4  7,e7   
,inclusion ( c]ta9 prepaym5t *>ges  7i7 
,9 g5]al ,if1 z a condition ( obta9+ !  
(f]$ comm]cial f9anc+ ! provid] requires
 ! recipi5t to pay (f ! balance ( an    
exi/+ loan or advance f ! same provid]1 
any prepaym5t *>ge or p5alty requir$ to 
be paid on ! exi/+ f9anc+ %all be       
includ$ z a f9anc+ *>ge4  7ii7 ,treatm5t
 :5 repaym5t am\nt is calculat$ z a fix$
 am\nt ,= purposes ( clause 7i71 =      
f9anc+ = :i* ! total repaym5t am\nt is  
calculat$ z a fix$ am\nt1 ! prepaym5t   
*>ge is equal to ! orig9al f9ance *>ge  
multipli$ by ! requir$ prepaym5t am\nt z
 a p]c5tage ( ! total repaym5t am\nt1   
m9us any portion ( ! total repaym5t     
am\nt =giv5 by ! provid] at ! "t (      

prepaym5t4  7#f7 ,op5-end comm]cial     
cr$it plan ,! t]m op5-end comm]cial     
cr$it plan means any small bus9ess      
f9anc+ provid$ by a p]son "u a plan 9   
:i* ! p]son reasonably contemplates     
repeat transactions1 :i* prescribes !   
t]ms ( su* transactions1 & :i* provides 
= a f9ance *>ge :i* may be comput$ f "t 
to "t on ! out/&+ unpaid balance4  7#g7 
,provid] ,! t]m provid] mean a p]son :o 
(f]s or provides small bus9ess f9anc+4  
7#h7 ,recipi5t ,! t]m recipi5t means a  
p]son :o is pres5t$ an (f] ( small      
bus9ess f9anc+4  7#i7 ,sales-bas$ f9anc+
 ,! t]m sales-bas$ f9anc+-- 7,a7 means a
 transaction :]e !re is an ext5sion (   
f9anc+ to a recipi5t t is repaid by !   
recipi5t1 ov] "t1 z a p]c5tage ( sales  
or rev5ue1 9 :i* ! paym5t am\nt may     
increase or decrease accord+ to ! volume
 ( sales made or rev5ue receiv$ by !    
recipi5t2 &  7,b7 includes transactions 
) a true-up me*anism4  7#aj7 ,small     
bus9ess ,! t]m small bus9ess has ! mean+
 giv5 ! t]m small-bus9ess conc]n "u     

section #c ( ! ,small ,bus9ess ,act 7#ae
 ,u4,s4,c4 #fcb74  7#aa7 ,small bus9ess 
f9anc+ ,! t]m small bus9ess f9anc+--    
7,a7 means any l9e ( cr$it1 clos$-end   
comm]cial cr$it1 sales-bas$ f9anc+1 or  
o!r non-equity obligation or alleg$     
obligation ( a p>tn]%ip1 corporation1   
coop]ative1 association1 or o!r entity t
 is #b1ejj1jjj or less2 &  7,b7 does n  
include any obligation or alleg$        
obligation ( an individual t is prim>ily
 = p]sonal1 family1 or h\sehold         
purposes4  7#ab7 ,specific (f] ,! t]m   
specific (f] means ! specific t]ms (    
small bus9ess f9anc+1 includ+ price or  
am\nt1 t is quot$ to a recipi5t1 bas$ on
 in=mation obta9$ f1 or ab\t ! recipi5t1
 :i*1 if accept$ by a recipi5t1 %all be 
b9d+ on ! provid]1 z applicable1 subject
 to any specific requirem5ts /at$ 9 su* 
t]ms4  #aib4 ,application ( ?is title to
 small bus9ess f9anc+  7a7 ,9 g5]al ,?is
 title %all apply to small bus9ess      
f9anc+ made to a small bus9ess to ! same
 ext5t z ?is title applies to ext5sions 

( cr$it made to a consum]4  7b7         
,rulemak+ ,! ,director %all issue su*   
rules z may be requir$ to c>ry out ?is  
*apt]4  7c7 ,bureau au?ority ,= purposes
 ( c>ry+ out ?is *apt] & o!r ,f$]al     
laws1 includ+ ! ,consum] ,f9ancial      
,protection ,act ( #bjaj1 ! ,bureau %all
 h ! same au?ority ) respect to small   
bus9ess f9anc+ z ! ,bureau has ) respect
 to consum] f9ancial products & s]vices4
  #aic4 ,additional disclosures  7a7 ,9 
g5]al ,any provid] (f]+ small bus9ess   
f9anc+ to a small bus9ess %all disclose 
! foll[+ pieces ( in=mation to a        
recipi5t at ! "t ( ext5d+ a specific (f]
 = small bus9ess f9anc+3 7#a7 ,f9anc+   
am\nt ,! total am\nt to be paid to !    
small bus9ess1 tak+ into acc\nt all fees
 & *>ges to be )held at disbursem5t4    
7#b7 ,annual p]c5tage rate  7,a7        
,clos$-end comm]cial cr$it ,) respect to
 clos$-end comm]cial cr$it1 ! annual    
p]c5tage rate1 us+ only ! words annual  
p]c5tage rate or ! abbreviation ,,apr1  
express$ z a ye>ly rate1 inclusive ( any

 fees & f9ance *>ges t _c be avoid$ by a
 recipi5t4  7,b7 ,op5-end comm]cial     
cr$it plans ,) respect to op5-end       
comm]cial cr$it plans1 ! annual p]c5tage
 rate1 us+ only ! words annual p]c5tage 
rate or ! abbreviation ,,apr1 express$ z
 a nom9al ye>ly rate1 inclusive ( any   
fees & f9ance *>ges t _c be avoid$ by a 
recipi5t1 bas$ on ! maximum am\nt (     
cr$it available to ! recipi5t & ! t]m   
result+ f mak+ ! m9imum requir$ paym5ts 
t]m z disclos$4  7,c7 ,sales-bas$ f9anc+
  7i7 ,9 g5]al ,) respect to sales-bas$ 
f9anc+1 ! e/imat$ annual p]c5tage rate1 
us+ ! words annual p]c5tage rate or !   
abbreviation ,,apr1 express$ z a ye>ly  
rate1 inclusive ( any fees & f9ance     
*>ges1 bas$ on ! e/imat$ t]m ( repaym5t 
& ! project$ p]iodic paym5t am\nts4     
7ii7 ,calculation ( c]ta9 paym5t am\nts 
,! e/imat$ t]m ( repaym5t & ! project$  
p]iodic paym5t am\nts %all be calculat$ 
bas$ on ! projection ( ! recipi5t's     
sales1 call$ ! project$ sales volume4   
7iii7 ,calculation ( project$ sales     

volumes ,= purposes ( clause 7ii71 !    
project$ sales volume may be calculat$--
 7,i7 accord+ to a me?od def9$ by !     
,director bas$ on ! recipi5t's hi/orical
 sales volume ov] a def9$ p]iod ( "t t  
is us$ = all sales-bas$ f9anc+          
transactions by t provid]2 or  7,,ii7 by
 ano!r me?od def9$ by ! provid] &       
approv$ by ! ,director1 ) ongo+ monitor+
 by ! ,director = accuracy bas$ on a    
comp>ison ( ! annual p]c5tage rate z    
disclos$ to ! recipi5t & z calculat$    
retrospectively ^u repaym5t ( ! f9anc+4 
7,d7 ,factor+  7i7 ,9 g5]al ,) respect  
to factor+1 ! e/imat$ annual p]c5tage   
rate1 us+ t t]m4  7ii7 ,calculation ,to 
calculate ! e/imat$ annual p]c5tage rate
 "u clause 7i7-- 7,i7 ! pur*ase am\nt   
%all be consid]$ ! f9anc+ am\nt2  7,,ii7
 ! pur*ase am\nt m9us ! total co/ (     
f9anc+ %all be consid]$ ! paym5t am\nt2 
&  7,,iii7 ! t]m is e/abli%$ by ! paym5t
 due date ( ! receivables4  7iii7       
,alt]nate me?od to e/imate t]m ,not)/&+ 
clause 7ii77,,iii71 a provid] may       

e/imate ! t]m = a factor+ transaction z 
! av]age paym5t p]iod1 its hi/orical    
data ov] a p]iod n to exce$ ! previ\s   
twelve mon?s1 conc]n+ paym5t invoices   
paid by ! p>ty ow+ ! acc\nts receivable 
9 "q4  7#c7 ,paym5t am\nt ,) respect to 
small bus9ess f9anc+ o!r ?an factor+--  
7,a7 = paym5t am\nts t are fix$-- 7i7 ! 
paym5t am\nts & frequ5cy 7e4g41 daily1  
weekly1 mon?ly72 &  7ii7 if ! t]m is    
long] ?an "o mon? & paym5t frequ5cy is  
o!r ?an mon?ly1 ! av]age total mon?ly   
paym5t am\nt2 or  7,b7 = paym5t am\nts t
 are v>iable-- 7i7 a full paym5t s*$ule 
or a description ( ! me?od us$ to       
calculate ! am\nts & frequ5cy ( paym5ts2
 &  7ii7 if ! t]m is long] ?an "o mon?1 
! e/imat$ av]age total mon?ly paym5t    
am\nt4  7#d7 ,t]m ,= f9anc+ o!r ?an     
factor+1 ! t]m ( ! small bus9ess f9anc+1
 ei!r 9 mon?s or 9 ye>s1 or1 if ! t]m is
 n fix$1 ! e/imat$ t]m1 calculat$ us+ ! 
same assumptions us$ to calculate !     
e/imat$ annual p]c5tage rate4  7#e7     
,f9ance *>ge ,! f9ance *>ge ( ! small   

bus9ess f9anc+1 brok5 d[n to %[ :at     
exp5ses & fees are includ$ 9 ! f9ance   
*>ge4  7#f7 ,prepaym5t co/ or sav+s ,9 !
 ev5t t a recipi5t elects to pay (f or  
ref9ance ! small bus9ess f9anc+ prior to
 full repaym5t1 ! provid] mu/ disclose--
 7,a7 :e!r ! recipi5t w\ld be requir$ to
 pay any f9ance *>ges o!r ?an int]e/    
accru$ s9ce ! recipi5t's la/ paym5t2 &  
7,b7 if ! recipi5t is requir$ to pay !  
f9ance *>ges describ$ "u subp>agraph    
7,a71 ! p]c5tage ( any unpaid portion ( 
! f9ance *>ge & maximum doll> am\nt !   
recipi5t c\ld be requir$ to pay2 &  7,c7
 :e!r ! recipi5t w\ld be requir$ to pay 
any additional fees n already includ$ 9 
! f9ance *>ge4  7#g7 ,collat]al         
requirem5ts ,any collat]al requirem5t t 
w be impos$ on ! small bus9ess 9        
connection ) ! small bus9ess f9anc+4    
7b7 ,=m ( disclosures  7#a7 ,9 g5]al    
,disclosures made pursuant to ?is       
section %all be 9 writ+1 at ! "t a      
specific (f] is made1 & 9 a mann] t is  
cle>1 conspicu\s1 complete1 & all[s !   

small bus9ess to comp>e ! range ( small 
bus9ess f9anc+ options t ! small bus9ess
 may be consid]+4  7#b7 ,prom95ce (     
disclosures ,9 mak+ any disclosure      
pursuant to ?is section1 ! disclosures  
requir$ "u p>agraphs 7#a71 7#b71 & 7#c7 
( subsection 7a7 %all be display$ mo/   
prom95tly4  #aid4 ,re/rictions on       
d\ble-dipp+ ,:5 a l5d] ( small bus9ess  
f9anc+ ref9ances or modifies an exi/+   
loan ) a fix$ fee z ! prim>y f9anc+     
*>ge1 ! l5d] may n *>ge a fee on ! small
 bus9ess's out/&+ pr9cipal unless !re is
 a tangible b5efit to ! small bus9ess4  
#aie4 ,additional provisions  7a7 ,rule 
( con/ruction ,no?+ 9 ?is *apt] may be  
con/ru$ to prev5t a provid] f provid+ or
 disclos+ additional in=mation on a     
small bus9ess f9anc+ be+ (f]$ to a      
recipi5t1 provid$ h[ev]1 t su*          
additional in=mation may n be disclos$ z
 "p ( ! disclosure requir$ by ?is *apt]4
  7b7 ,use ( t]ms  7#a7 ,rate ,if o!r   
metrics ( f9anc+ co/ are disclos$ or us$
 9 ! application process ( a small      

bus9ess f9anc+1 ^! metrics %all n be    
pres5t$ z a rate if !y are n ! annual   
int]e/ rate or ! annual p]c5tage rate4  
7#b7 ,int]e/ ,! t]m int]e/1 :5 us$ to   
describe a p]c5tage rate to a recipi5t  
or pot5tial recipi5t1 %all only be us$  
to describe annualiz$ p]c5tage rates1   
su* z ! annual int]e/ rate4  7c7        
,requirem5t ,to /ate ,,apr ,:5 a provid]
 /ates 9 writ+ a rate ( f9ance *>ge or a
 f9anc+ am\nt to a recipi5t dur+ an     
application process = small bus9ess     
f9anc+1 ! provid] %all also /ate !      
annual p]c5tage rate or1 9 ! case (     
sales-bas$ f9anc+ or factor+1 ! e/imat$ 
annual p]c5tage rate1 ) equal or great] 
prom95ce1 us+ ! t]m annual p]c5tage rate
 or ! abbreviation ,,apr4  4  7b7       
,cl]ical am5dm5t ,! table ( *apt]s = !  
,tru? 9 ,l5d+ ,act is am5d$ by add+ at !
 end ! foll[+3  #f4 ,small ,bus9ess     
,f9anc+ 444 #aia  4  7c7 ,rulemak+      
deadl9e ,n lat] ?an ! end ( ! #bd-mon?  
p]iod beg9n+ on ! date ( enactm5t ( ?is 
,act1 ! ,director ( ! ,bureau ( ,consum]

 ,f9ancial ,protection %all issue f9al  
rules to c>ry out ! am5dm5ts made by ?is
 section4  7d7 ,effective date ,*apt] #f
 ( ! ,tru? 9 ,l5d+ ,act1 z add$ by      
subsection 7a71 %all take effect aft] ! 
end ( ! #cf-mon? p]iod beg9n+ on ! date 
( enactm5t ( ?is ,act4  ,,ii ,regulation
 ( ,brok]s  #bja4 ,(fice ( ,brok]       
,regulation ,section #ajac ( ! ,consum] 
,f9ancial ,protection ,act ( #bjaj 7#ab 
,u4,s4,c4 #edic7 is am5d$ by add+ at !  
end ! foll[+3  7i7 ,(fice ( ,brok]      
,regulation ,!re is e/abli%$ 9 ! ,bureau
 an ,(fice ( ,brok] ,regulation1 :i*    
%all be responsible = c>ry+ out section 
#ajah4  4  #bjb4 ,regulation ( brok]s   
7a7 ,9 g5]al ,! ,consum] ,f9ancial      
,protection ,act ( #bjaj 7#ab ,u4,s4,c4 
#edha et seq47 is am5d$-- 7#a7 by       
r$esignat+ section #ajah z section      
#ajai2 &  7#b7 by ins]t+ aft] section   
#ajag ! foll[+3  #ajah4 ,regulation (   
brok]s  7a7 ,def9itions ,9 ?is section3 
7#a7 ,brok] ,! t]m brok] means a natural
 p]son :o-- 7,a7 is n a cr$itor or      

pur*as]2 &  7,b7 solicits & pres5ts (f]s
 ( comm]cial f9anc+ on behalf ( a ?ird  
p>ty4  7#b7 ,director ,! t]m ,director  
means ! ,director ( ! ,bureau ( ,consum]
 ,f9ancial ,protection4  7#c7 ,/ate ,!  
t]m ,/ate means ea* ( ! sev]al ,/ates1 !
 ,di/rict ( ,columbia1 & ! t]ritories & 
possessions ( ! ,unit$ ,/ates4  7#d7    
,o!r t]ms ,! t]ms small bus9ess & small 
bus9ess f9anc+ h ! mean+ giv5 ^? t]ms "u
 section #aic ( ! ,tru? 9 ,l5d+ ,act4   
7b7 ,regulations  7#a7 ,9 g5]al ,a brok]
 %all1 9 facilitat+ f9anc+ (f]$ by a    
?ird-p>ty l5d] = a small bus9ess-- 7,a7 
provide ! small bus9ess ) a disclosure  
conta9+ ! in=mation describ$ "u p>agraph
 7#b72 &  7,b7 educate ! small bus9ess  
on ea* small bus9ess f9anc+ option &    
ensure t ! small bus9ess reasonably     
und]/&s ! co/ & t]ms ( ! small bus9ess  
f9anc+ z well z ! pros & cons ( ! small 
bus9ess f9anc+ decision be=e ! small    
bus9ess ent]s into a contract = su*     
small bus9ess f9anc+4  7#b7 ,cont5ts (  
disclosure ,ea* disclosure requir$ "u   

p>agraph 7#a7 %all include3 7,a7 ,a li/ 
( all small bus9ess f9anc+ options = :i*
 ! small bus9ess qualifies ?r\gh !      
brok]'s s]vices &1 ) respect to ea* su* 
small bus9ess f9anc+ option1 !          
disclosures describ$ "u section #aic ( !
 ,tru? 9 ,l5d+ ,act4  7,b7 ,! l[e/      
annual p]c5tage rate option4  7,c7 ,all 
! l5d]s to :i* ! brok] has s5t or w s5d 
small bus9ess f9anc+ applications on !  
small bus9ess's behalf4  7,d7 ,all      
comp5sation t w be paid to ! brok]1     
includ+-- 7i7 all *>ges t w be paid     
directly or indirectly by ! small       
bus9ess2 &  7ii7 :e!r su* comp5sation   
paid to ! brok] w be paid up front or   
f9anc$ ?r\gh ! life ( ! small bus9ess   
f9anc+4  7,e7 ,all conflicts ( int]e/ ! 
brok] may h4  7,f7 ,a break d[n &       
explanation ( ! brok]'s fee /ructure1   
includ+-- 7i7 any f9ancial or economic  
int]e/ ! brok] has 9 (f]+ a product to !
 small bus9ess2 &  7ii7 :e!r ! brok] w  
receive a high] fee = brok]+ a c]ta9    
small bus9ess f9anc+ ov] ano!r small    

bus9ess f9anc+4  7#c7 ,public disclosure
 ( previ\s borr[] results  7,a7 ,website
 disclosure ,ea* brok] %all po/ cle>ly &
 prom95tly on ! website ( ! brok] !     
anonym\s & aggregat$ results ( previ\s  
small bus9ess borr[]s :o h obta9$ small 
bus9ess f9anc+ ?r\gh ! brok]'s s]vices1 
9 t]ms ( annual p]c5tage rate & f9anc+  
product4  7,b7 ,brok]s )\t websites     
,not)/&+ subp>agraph 7,a71 if a brok]   
does n h a website1 ! brok] %all        
disclose ! in=mation describ$ 9         
subp>agraph 7,a7 9 a pap] =mat1 ^u      
reque/ by any small bus9ess borr[]4     
7#d7 ,small bus9ess compla9ts ) respect 
to brok]s ,! ,director %all-- 7,a7      
collect compla9ts f small bus9esses )   
respect to _! exp]i5ces ) brok]s2 &     
7,b7 make su* compla9ts available to !  
public on ! website ( ! ,bureau (       
,consum] ,f9ancial ,protection4  7#e7   
,re/riction on be/ int]e/ claims ,a     
brok] t is paid high] fees ) c]ta9      
l5d]s1 small bus9ess f9anc+ types1 or   
?r\gh t]ms o!r ?an ! size ( ! small     

bus9ess f9anc+ may n /ate t ! brok] is  
act+ 9 ! be/ int]e/ ( ! pot5tial small  
bus9ess borr[]4  7#f7 ,prohibition on   
/e]+ ,a loan orig9ator or brok] may n   
/e] a small bus9ess to small bus9ess    
f9anc+ t is n 9 ! small bus9ess's be/   
int]e/4  7#g7 ,re/rictions on c]ta9 fees
  7,a7 ,no fee if p>ties d n come to an 
agreem5t ,a brok] may n *>ge a small    
bus9ess any fee if-- 7i7 ! brok] is     
unable to f9d ! small bus9ess f9anc+2 or
  7ii7 ! small bus9ess *ooses n to      
accept f9anc+ ?r\gh ! brok]'s s]vices4  
7,b7 ,replacem5t ( exi/+ f9anc+ ,if a   
brok] or ?ird-p>ty l5d] (f]s an exi/+   
small bus9ess cu/om] new f9anc+1 nei!r !
 brok] nor ! ?ird-p>ty l5d] may *>ge !  
small bus9ess a new f9anc+ *>ge = !     
f9anc+ be+ replac$4  7c7 ,brok] lic5s+ &
 en=cem5t  7#a7 ,/ate brok] lic5s+ ,a   
p]son may only p]=m ! function ( a brok]
 9 a ,/ate if ! p]son is lic5s$ z a     
brok]-- 7,a7 ) respect to a ,/ate t has 
a cov]$ brok] lic5s+ law1 by ! ,/ate2 or
  7,b7 ) respect to a ,/ate t does n h a

 cov]$ brok] lic5s+ law1 by ! ,bureau4  
7#b7 ,cov]$ brok] lic5s+ law ,) respect 
to a ,/ate1 ! t]m cov]$ brok] lic5s+ law
 means a ,/ate law t ! ,director        
det]m9es meets ! foll[+ requirem5ts3    
7,a7 ,lic5s+ ,! law provides = a process
 to lic5se brok]s op]at+ 9 ! ,/ate4     
7,b7 ,prohibition on unlic5s$ brok]s ,! 
law prohibits any p]son f act+ z a brok]
 9 ! ,/ate unless su* p]son is lic5s$ by
 ! ,/ate z a brok]4  7,c7 ,prohibition  
on lic5s+ c]ta9 individuals ,! law      
prohibits lic5s+ an individual z a brok]
 if su* individual-- 7i7 has _h a ,/ate 
lic5se revok$ = cause 9 any ,/ate2  7ii7
 has _h a ,f$]al lic5se revok$ = cause2 
or  7iii7 has be5 convict$ ( any crime  
involv+ ly+1 deceit1 or misappropriation
 ( ! tru?4  7,d7 ,limitation on brok]   
employees ,! law prohibits a brok] f    
employ+ any individual1 o!r ?an a       
cl]ical employee1 :o is describ$ "u     
clause 7i71 7ii71 or 7iii7 ( subp>agraph
 7,c74  7,e7 ,exam9ation ,! law requires
 a lic5s$ brok] to und]go ,/ate audits &

 provides = exam9ation ( ! brok] by     
,/ate regulators4  7,f7 ,en=cem5t ,)    
respect to any violation ( a ,/ate law  
or regulation 9 connection ) p]=m+ !    
duties ( a brok]1 ! law provides =-- 7i7
 an initial w>n+ be+ giv5 to ! brok]2   
7ii7 a cure p]iod (f]$ to ! brok] dur+  
:i* ! brok] c cure ! violation2 &  7iii7
 if ! brok] fails to cure ! violation1  
civil or crim9al p5alties :i* include-- 
7,i7 ! revocation ( any brok] lic5se    
grant$ to ! violator2 &  7,,ii7 a ban on
 ! violator be+ grant$ any o!r          
pr(essional lic5se = a p]iod ( n less   
?an #e ye>s4  7,g7 ,public availability 
( discipl9>y actions ,! law requires !  
,/ate ag5cy 9 *>ge ( lic5s+ brok]s to   
ma9ta9 a website t li/s all discipl9>y  
actions tak5 aga9/ brok]s4  7#c7 ,bureau
 brok] lic5s+ ,n lat] ?an ! end ( !     
#ab-mon? p]iod beg9n+ on ! date (       
enactm5t ( ?is section1 ! ,director %all
 e/abli% a ,f$]al brok] lic5s+ program  
t1 to ! ext5t practicable1 meets !      
requirem5ts = a cov]$ brok] lic5s+ law  

describ$ "u p>agraph 7#b74  7#d7        
,effective date  7,a7 ,9 g5]al          
,subsection 7a7 %all take effect aft] ! 
end ( ! #b-ye> p]iod beg9n+ on ! date ( 
enactm5t ( ?is section4  7,b7 ,safe     
h>bor ,not)/&+ subsection 7a71 a p]son  
act+ z brok] 9 a ,/ate on ! date (      
enactm5t ( ?is section :o has appli$ = a
 brok] lic5se "u a ,/ate cov]$ brok]    
lic5s+ law 7or1 ) respect to a ,/ate t  
does n h a cov]$ brok] lic5s+ law1 ) !  
,f$]al brok] lic5s+ program e/abli%$ "u 
p>agraph 7#c77 may cont9ue to act z a   
brok] 9 su* ,/ate :ile ! application is 
p5d+4  7d7 ,rulemak+ ,! ,director may   
issue su* rules z may be necess>y to    
c>ry out ?is section4  7e7 ,p5alties    
7#a7 ,civil p5alties ,any p]son :o      
violates a provision ( ?is section      
%all-- 7,a7 be f9$ n less ?an #e1jjj & n
 m ?an #gb1jjj2  7,b7 disgorge any funds
 or o!r prop]ty obta9$ 9 connection )   
su* violation2  7,c7 9 ! case ( an      
individual lic5s$ z a brok] by !        
,bureau1 h su* lic5se susp5d$ = #a ye>2 

&  7,d7 9 ! case ( an individual lic5s$ 
z a brok] by ! ,bureau :o has violat$ a 
provision ( ?is section previ\sly1 h su*
 lic5se p]man5tly revok$4  7#b7 ,crim9al
 p5alty ,any p]son :o violates a        
provision ( ?is section 9 an egregi\s   
mann] %all be f9$ n m ?an #e1jjj1jjj or 
imprison$ n m ?an #bj ye>s1 or bo?4     
7#c7 ,liability = employ] ,any p]son    
employ+ a brok] at ! "t ! brok] violates
 a provision ( ?is section %all-- 7,a7  
be f9$ n m ?an #hec1jfb2  7,b7 disgorge 
any funds or o!r prop]ty obta9$ 9       
connection ) su* violation2  7,c7 be    
prohibit$ f tak+ any action involv+     
small bus9ess l5d+ or ! brok]age indu/ry
 = n m ?an #cj bus9ess days2 &  7,d7 9 !
 case ( a violation t 0 9 an egregi\s   
mann]1 be prohibit$ f tak+ any action   
involv+ small bus9ess l5d+ or ! brok]age
 indu/ry = m ?an #cj bus9ess days1 :i*  
may include a p]man5t prohibition on !  
p]son tak+ any action involv+ small     
bus9ess l5d+ or ! brok]age indu/ry4     
7#d7 ,f$]al b> = ,/ate violators ,if an 

individual has _! ,/ate brok] lic5se    
revok$ by reason ( violat+ a ,/ate law  
or regulation 9 connection ) p]=m+ !    
duties ( a brok]-- 7,a7 any pr(essional 
lic5se grant$ to ! individual by !      
,f$]al ,gov]nm5t %all be t]m9at$2 &     
7,b7 ! individual may n receive a       
pr(essional lic5se f ! ,f$]al ,gov]nm5t 
be=e ! end ( ! #e-ye> p]iod beg9n+ on ! 
date ( su* revocation4  7#e7 ,/ate      
en=cem5t au?ority ,an action to en=ce a 
violation ( ?is section may also be     
br\ght by a ,/ate attorney g5]al 9 any  
appropriate ,unit$ ,/ates di/rict c\rt1 
or any o!r c\rt ( compet5t jurisdiction4
  4  7b7 ,cl]ical am5dm5t ,! table (    
cont5ts 9 section #a7;b7 ( !            
,dodd-,frank ,wall ,/reet ,re=m &       
,consum] ,protection ,act is am5d$ by   
/rik+ ! item relat+ to section #ajag &  
ins]t+ ! foll[+3  ,sec4 #ajag4          
,regulation ( brok]s4 ,sec4 #ajah4      
,effective date4  4