business in connection with the small business fi-
nancing. 
‘‘(b) FORM OF DISCLOSURES.— 
‘‘(1) IN GENERAL.—Disclosures made pursuant 
to this section shall be in writing, at the time a spe-
cific offer is made, and in a manner that is clear, 
conspicuous, complete, and allows the small business 
to compare the range of small business financing op-
tions that the small business may be considering. 
‘‘(2) PROMINENCE OF DISCLOSURES.—In mak-
ing any disclosure pursuant to this section, the dis-
closures required under paragraphs (1), (2), and (3) 
of subsection (a) shall be displayed most promi-
nently. 
‘‘§ 194. Restrictions on double-dipping 
‘‘When a lender of small business financing refi-
nances or modifies an existing loan with a fixed fee as 
the primary financing charge, the lender may not charge 
a fee on the small business’s outstanding principal unless 
there is a tangible benefit to the small business. 
‘‘§ 195. Additional provisions 
‘‘(a) RULE
OF CONSTRUCTION.—Nothing in this 
chapter may be construed to prevent a provider from pro-
viding or disclosing additional information on a small busi-
ness financing being offered to a recipient, provided how-
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
ever, that such additional information may not be dis-
closed as part of the disclosure required by this chapter. 
‘‘(b) USE OF TERMS.— 
‘‘(1) RATE.—If other metrics of financing cost 
are disclosed or used in the application process of a 
small business financing, these metrics shall not be 
presented as a ‘rate’ if they are not the annual in-
terest rate or the annual percentage rate. 
‘‘(2) INTEREST.—The term ‘interest’, when 
used to describe a percentage rate to a recipient or 
potential recipient, shall only be used to describe 
annualized percentage rates, such as the annual in-
terest rate. 
‘‘(c) REQUIREMENT TO STATE APR.—When a pro-
vider states in writing a rate of finance charge or a financ-
ing amount to a recipient during an application process 
for small business financing, the provider shall also state 
the annual percentage rate or, in the case of sales-based 
financing or factoring, the estimated annual percentage 
rate, with equal or greater prominence, using the term ‘an-
nual percentage rate’ or the abbreviation ‘APR’.’’. 
(b) CLERICAL AMENDMENT.—The table of chapters 
for the Truth in Lending Act is amended by adding at 
the end the following: 
‘‘6. SMALL BUSINESS FINANCING ... 191’’. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6211
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
(c) RULEMAKING DEADLINE.—Not later than the 
end of the 24-month period beginning on the date of en-
actment of this Act, the Director of the Bureau of Con-
sumer Financial Protection shall issue final rules to carry 
out the amendments made by this section. 
(d) EFFECTIVE DATE.—Chapter 6 of the Truth in 
Lending Act, as added by subsection (a), shall take effect 
after the end of the 36-month period beginning on the date 
of enactment of this Act. 
TITLE II—REGULATION OF 
BROKERS 
SEC. 201. OFFICE OF BROKER REGULATION. 
Section 1013 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5493) is amended by adding at 
the end the following: 
‘‘(i) OFFICE OF BROKER REGULATION.—There is es-
tablished in the Bureau an Office of Broker Regulation, 
which shall be responsible for carrying out section 1018.’’. 
SEC. 202. REGULATION OF BROKERS. 
(a) IN GENERAL.—The Consumer Financial Protec-
tion Act of 2010 (12 U.S.C. 5481 et seq.) is amended— 
(1) by redesignating section 1018 as section 
1019; and 
(2) by inserting after section 1017 the fol-
lowing: 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘SEC. 1018. REGULATION OF BROKERS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) BROKER.—The term ‘broker’ means a nat-
ural person who— 
‘‘(A) is not a creditor or purchaser; and 
‘‘(B) solicits and presents offers of com-
mercial financing on behalf of a third party. 
‘‘(2) DIRECTOR.—The term ‘Director’ means 
the Director of the Bureau of Consumer Financial 
Protection. 
‘‘(3) STATE.—The term ‘State’ means each of 
the several States, the District of Columbia, and the 
territories and possessions of the United States. 
‘‘(4) OTHER TERMS.—The terms ‘small busi-
ness’ and ‘small business financing’ have the mean-
ing given those terms under section 193 of the 
Truth in Lending Act. 
‘‘(b) REGULATIONS.— 
‘‘(1) IN GENERAL.—A broker shall, in facili-
tating financing offered by a third-party lender for 
a small business— 
‘‘(A) provide the small business with a dis-
closure containing the information described 
under paragraph (2); and 
‘‘(B) educate the small business on each 
small business financing option and ensure that 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
the small business reasonably understands the 
cost and terms of the small business financing 
as well as the pros and cons of the small busi-
ness financing decision before the small busi-
ness enters into a contract for such small busi-
ness financing. 
‘‘(2) CONTENTS OF DISCLOSURE.—Each disclo-
sure required under paragraph (1) shall include: 
‘‘(A) A list of all small business financing 
options for which the small business qualifies 
through the broker’s services and, with respect 
to each such small business financing option, 
the disclosures described under section 193 of 
the Truth in Lending Act. 
‘‘(B) The lowest annual percentage rate 
option. 
‘‘(C) All the lenders to which the broker 
has sent or will send small business financing 
applications on the small business’s behalf. 
‘‘(D) All compensation that will be paid to 
the broker, including— 
‘‘(i) all charges that will be paid di-
rectly or indirectly by the small business; 
and 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(ii) whether such compensation paid 
to the broker will be paid up front or fi-
nanced through the life of the small busi-
ness financing. 
‘‘(E) All conflicts of interest the broker 
may have. 
‘‘(F) A break down and explanation of the 
broker’s fee structure, including— 
‘‘(i) any financial or economic interest 
the broker has in offering a product to the 
small business; and 
‘‘(ii) whether the broker will receive a 
higher fee for brokering a certain small 
business financing over another small busi-
ness financing. 
‘‘(3) PUBLIC DISCLOSURE OF PREVIOUS BOR-
ROWER RESULTS.— 
‘‘(A) WEBSITE DISCLOSURE.—Each broker 
shall post clearly and prominently on the 
website of the broker the anonymous and aggre-
gated results of previous small business bor-
rowers who have obtained small business fi-
nancing through the broker’s services, in terms 
of annual percentage rate and financing prod-
uct. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(B) BROKERS
WITHOUT
WEBSITES.— 
Notwithstanding subparagraph (A), if a broker 
does not have a website, the broker shall dis-
close the information described in subparagraph 
(A) in a paper format, upon request by any 
small business borrower. 
‘‘(4) SMALL BUSINESS COMPLAINTS WITH RE-
SPECT TO BROKERS.—The Director shall— 
‘‘(A) collect complaints from small busi-
nesses with respect to their experiences with 
brokers; and 
‘‘(B) make such complaints available to the 
public on the website of the Bureau of Con-
sumer Financial Protection. 
‘‘(5) 
RESTRICTION
ON
BEST
INTEREST 
CLAIMS.—A broker that is paid higher fees with cer-
tain lenders, small business financing types, or 
through terms other than the size of the small busi-
ness financing may not state that the broker is act-
ing in the best interest of the potential small busi-
ness borrower. 
‘‘(6) PROHIBITION
ON
STEERING.—A loan 
originator or broker may not steer a small business 
to small business financing that is not in the small 
business’s best interest. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(7) RESTRICTIONS ON CERTAIN FEES.— 
‘‘(A) NO FEE IF PARTIES DO NOT COME TO 
AN AGREEMENT.—A broker may not charge a 
small business any fee if— 
‘‘(i) the broker is unable to find the 
small business financing; or 
‘‘(ii) the small business chooses not to 
accept financing through the broker’s serv-
ices. 
‘‘(B) REPLACEMENT OF EXISTING FINANC-
ING.—If a broker or third-party lender offers 
an existing small business customer new financ-
ing, neither the broker nor the third-party lend-
er may charge the small business a new financ-
ing charge for the financing being replaced. 
‘‘(c) BROKER LICENSING AND ENFORCEMENT.— 
‘‘(1) STATE
BROKER
LICENSING.—A person 
may only perform the function of a broker in a State 
if the person is licensed as a broker— 
‘‘(A) with respect to a State that has a 
covered broker licensing law, by the State; or 
‘‘(B) with respect to a State that does not 
have a covered broker licensing law, by the Bu-
reau. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(2) COVERED BROKER LICENSING LAW.—With 
respect to a State, the term ‘covered broker licensing 
law’ means a State law that the Director determines 
meets the following requirements: 
‘‘(A) LICENSING.—The law provides for a 
process to license brokers operating in the 
State. 
‘‘(B) PROHIBITION ON UNLICENSED BRO-
KERS.—The law prohibits any person from act-
ing as a broker in the State unless such person 
is licensed by the State as a broker. 
‘‘(C) PROHIBITION ON LICENSING CERTAIN 
INDIVIDUALS.—The law prohibits licensing an 
individual as a broker if such individual— 
‘‘(i) has had a State license revoked 
for cause in any State; 
‘‘(ii) has had a Federal license re-
voked for cause; or 
‘‘(iii) has been convicted of any crime 
involving lying, deceit, or misappropriation 
of the truth. 
‘‘(D) LIMITATION
ON
BROKER
EMPLOY-
EES.—The law prohibits a broker from employ-
ing any individual, other than a clerical em-
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
ployee, who is described under clause (i), (ii), or 
(iii) of subparagraph (C). 
‘‘(E) EXAMINATION.—The law requires a 
licensed broker to undergo State audits and 
provides for examination of the broker by State 
regulators. 
‘‘(F) ENFORCEMENT.—With respect to 
any violation of a State law or regulation in 
connection with performing the duties of a 
broker, the law provides for— 
‘‘(i) an initial warning being given to 
the broker; 
‘‘(ii) a cure period offered to the 
broker during which the broker can cure 
the violation; and 
‘‘(iii) if the broker fails to cure the 
violation, civil or criminal penalties which 
include— 
‘‘(I) the revocation of any broker 
license granted to the violator; and 
‘‘(II) a ban on the violator being 
granted any other professional license 
for a period of not less than 5 years. 
‘‘(G) PUBLIC AVAILABILITY OF DISCIPLI-
NARY
ACTIONS.—The law requires the State 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
agency in charge of licensing brokers to main-
tain a website that lists all disciplinary actions 
taken against brokers. 
‘‘(3) BUREAU BROKER LICENSING.—Not later 
than the end of the 12-month period beginning on 
the date of enactment of this section, the Director 
shall establish a Federal broker licensing program 
that, to the extent practicable, meets the require-
ments for a covered broker licensing law described 
under paragraph (2). 
‘‘(4) EFFECTIVE DATE.— 
‘‘(A) IN
GENERAL.—Subsection (a) shall 
take effect after the end of the 2-year period 
beginning on the date of enactment of this sec-
tion. 
‘‘(B) 
SAFE
HARBOR.—Notwithstanding 
subsection (a), a person acting as broker in a 
State on the date of enactment of this section 
who has applied for a broker license under a 
State covered broker licensing law (or, with re-
spect to a State that does not have a covered 
broker licensing law, with the Federal broker li-
censing program established under paragraph 
(3)) may continue to act as a broker in such 
State while the application is pending. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(d) RULEMAKING.—The Director may issue such 
rules as may be necessary to carry out this section. 
‘‘(e) PENALTIES.— 
‘‘(1) CIVIL PENALTIES.—Any person who vio-
lates a provision of this section shall— 
‘‘(A) be fined not less than $5,000 and not 
more than $72,000; 
‘‘(B) disgorge any funds or other property 
obtained in connection with such violation; 
‘‘(C) in the case of an individual licensed 
as a broker by the Bureau, have such license 
suspended for 1 year; and 
‘‘(D) in the case of an individual licensed 
as a broker by the Bureau who has violated a 
provision of this section previously, have such li-
cense permanently revoked. 
‘‘(2) CRIMINAL PENALTY.—Any person who vio-
lates a provision of this section in an egregious man-
ner shall be fined not more than $5,000,000 or im-
prisoned not more than 20 years, or both. 
‘‘(3) LIABILITY FOR EMPLOYER.—Any person 
employing a broker at the time the broker violates 
a provision of this section shall— 
‘‘(A) be fined not more than $853,062; 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(B) disgorge any funds or other property 
obtained in connection with such violation; 
‘‘(C) be prohibited from taking any action 
involving small business lending or the broker-
age industry for not more than 30 business 
days; and 
‘‘(D) in the case of a violation that was in 
an egregious manner, be prohibited from taking 
any action involving small business lending or 
the brokerage industry for more than 30 busi-
ness days, which may include a permanent pro-
hibition on the person taking any action involv-
ing small business lending or the brokerage in-
dustry. 
‘‘(4) FEDERAL BAR FOR STATE VIOLATORS.—If 
an individual has their State broker license revoked 
by reason of violating a State law or regulation in 
connection with performing the duties of a broker— 
‘‘(A) any professional license granted to 
the individual by the Federal Government shall 
be terminated; and 
‘‘(B) the individual may not receive a pro-
fessional license from the Federal Government 
before the end of the 5-year period beginning 
on the date of such revocation. 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS
‘‘(5) STATE
ENFORCEMENT
AUTHORITY.—An 
action to enforce a violation of this section may also 
be brought by a State attorney general in any appro-
priate United States district court, or any other 
court of competent jurisdiction.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act is amended by striking the item 
relating to section 1017 and inserting the following: 
‘‘Sec. 1017. Regulation of brokers. 
‘‘Sec. 1018. Effective date.’’. 
Æ 
VerDate Sep 11 2014 
04:30 Aug 22, 2020
Jkt 099200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6301
E:\BILLS\H7889.IH
H7889
kjohnson on DSK79L0C42PROD with BILLS