N.Y. Financial Services Law § 806: Factoring transaction disclosure requirements

§ 806. Factoring transaction disclosure requirements. A provider,

subject to this article, shall provide the following disclosures to a

recipient at the time of extending a specific offer for a factoring

transaction according to formatting prescribed by the superintendent:

(a) The amount of the receivables purchase price paid to the recipient

and, if different from the purchase price, the amount disbursed to the

recipient after any fees deducted or withheld at disbursement.

(b) The finance charge.

(c) The estimated annual percentage rate, using that term, calculated

according to the federal Truth in Lending Act, Regulation Z, 12 C.F.R. §

1026 Appendix J, as a "single advance, single payment transaction",

regardless of whether such act or such regulation would require such a

calculation. To calculate the estimated annual percentage rate, the

purchase amount is considered the financing amount, the purchase amount

minus the finance charge is considered the payment amount, and the term

is established by the payment due date of the receivables. As an

alternate method of establishing the term, the provider may estimate the

term for a factoring transaction as the average payment period, its

historical data over a period not to exceed the previous twelve months,

concerning payment invoices paid by the party owing the accounts

receivable in question.

(d) The total payment amount, which is the purchase amount plus the

finance charge.

(e) A description of all other potential fees and charges that can be

avoided by the recipient.

(f) A description of the receivables purchased and any additional

collateral requirements or security interests.