MCA Disclosure Laws
**Texas** {#texas}
Where We Are Currently
Effective **September 1, 2025**, Texas regulates disclosures for commercial **sales-based financing** under **Finance Code Chapter 398**, enacted by **House Bill 700 (2025)**. The law requires providers and brokers to register with the **Office of Consumer Credit Commissioner (OCCC)** by **December 31, 2026**, and to provide standardized disclosures before consummation of covered transactions. The statute does not require an APR disclosure, distinguishing Texas from other state models. [Texas Finance Code Chapter 398 (Commercial Sales-Based Financing)](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm?utm_source=chatgpt.com)
How We Got Here
HB 700 (2025) was signed June 20, 2025, creating Finance Code Chapter 398 with staged effective dates for disclosures and registration. ([Holland & Knight](https://www.hklaw.com/en/insights/publications/2025/06/texas-enacts-salesbased-financing-registration-and-disclosure-law))
What Funders Need to Know
Subject
Applies to providers and brokers of commercial sales-based financing. ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
Exemptions
Chapter 398 contains statutory exemptions/definitions (e.g., depository institutions and other categories) for commercial sales-based financing; APR disclosure is not required under Chapter 398. [Texas Statutes](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm?utm_source=chatgpt.com)
Compliance Requirement
Providers and brokers must register with the Office of Consumer Credit Commissioner by December 31, 2026; disclosure obligations begin September 1, 2025.
Disclosure Requirements
Itemized terms including financing amount, disbursement, finance charge/total repayment, payment amounts/method, fees, collateral/guarantees as applicable; delivered at required timing set by Chapter 398. ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
Other Rules (optional)
Texas House Bill 700 (Finance Code Chapter 398) § 398.005(b)(3) grants the Office of Consumer Credit Commissioner the authority to **âassess civil penaltiesâ** for violations of the chapter. [statutes.capitol.texas.gov](https://statutes.capitol.texas.gov/Docs/FI/pdf/FI.398.pdf?utm_source=chatgpt.com)
Penalties
Civil penalties per Chapter 398. ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
Official Documents (links)
Texas Finance Code Chapter 398 (Commercial Sales-Based Financing). ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
Expert Opinions and Analysis (links)
*Texas Governor Signs HB 700 Into Law* ([Holland & Knight](https://www.hklaw.com/en/insights/publications/2025/06/texas-governor-signs-commercial-sales-based-financing-legislation?utm_source=chatgpt.com))
*Texas Commercial Sales-Based Financing Law Poses Unique Challenges to Financial Services Industry* (Alston & Bird)
*Texas Introduces Legislation to Regulate Sales-Based Commercial Financing* ([Troutman Pepper Consumer Financial Services Law Monitor](https://www.consumerfinancialserviceslawmonitor.com/2025/04/texas-introduces-legislation-to-regulate-sales-based-commercial-financing/?utm_source=chatgpt.com))
Operator Checklist
- Texas Governor Signs Commercial Sales-Based Financing Legislation Into Law ([Holland & Knight](https://www.hklaw.com/en/insights/publications/2025/06/texas-governor-signs-commercial-sales-based-financing-legislation))
- Use Chapter 398 itemization for content and timing. ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
- Confirm you are offering sales-based financing (not a product outside scope). ([Texas Finance Code](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.398.htm))
- Track exemptions and preserve copies of delivered disclosures.