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119-hr-3244119th CongressWALLET

CASH Act

Sponsored By: Representative Lucas, Frank D. [R-OK-3]

Introduced

Summary

Clear upfront disclosure of factoring terms. The CASH Act would require providers that buy a small business's accounts receivable to give a written disclosure before entering a factoring facility when the expected transactions are under $500,000.

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  • Small businesses would get a written breakdown showing the discount or percentage taken, any fees, the reserve amount and terms, the facility duration, and an illustrative $10,000 transaction showing net pay.
  • Providers that purchase receivables in interstate commerce would have to deliver these disclosures before entering qualifying factoring facility agreements.
  • States and localities could not impose disclosure rules that add to or conflict with the Act's federal disclosure requirements.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 0 costs, 2 mixed.

One federal rule for factoring disclosures

States and cities would not be able to add different or extra disclosure rules for small-business factoring. Providers would follow a single federal disclosure standard. This would apply only to disclosure requirements tied to factoring facility agreements.

Upfront disclosures for small-business factoring

Providers would have to give clear, written terms before you sign a small factoring facility agreement. This would apply if total authorized factoring, including fees, is under $500,000, or both sides expect under $500,000 when no total is listed. The disclosure would show the discount from the invoice face value, all fees, any reserve amount and terms, and the agreement length. It would also include a worked example for a $10,000 invoice showing the discount, fees, maximum reserve, and net cash you would get. This would not apply to changes to an existing agreement.

Defines covered small-business factoring deals

The bill would define what counts as a factoring transaction and who is covered. It would treat the sale of existing invoices, where the customer pays the bill, as a true sale if the parties call it a sale. Loans or advances repaid from future, not-yet-earned invoices would be excluded. It would define a provider as a purchaser in interstate commerce, and define a reserve as money held back until invoices are paid. It would use the Small Business Act definition of a small business.

Sponsors & CoSponsors

Sponsor

Lucas, Frank D. [R-OK-3]

OK • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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