Bob Perry (pictured top), executive director of the Illinois Mortgage Professionals Association, is concerned about Illinois House Bill 0744, named the “Small Business Financing Transparency Act.”
If passed, it could impose new fees and regulations on independent commercial brokers and non-banks that banks would be exempt from. It also creates new disclosures, which could be confusing to customers.
“In a nutshell, you’re creating an unlevel playing field,” Perry told Mortgage Professional America. “That’s really one of the critical things. The other thing is that the ecosystem that’s being state-designed, as proposed in this bill, is going to create a whole new separate set of disclosures from the consumer viewpoint.
“That’s going to create a substantial amount of confusion because if you go into a federally chartered institution and then into a state-licensed institution and find a completely different set of documents. Those documents that they’re looking to design would resemble residential-style disclosures.”
Fees, disclosures, and a new database
These disclosures, required by brokers and non-banks, would mirror residential disclosures, including an APR calculation. This would not be required by banks, which means customers shopping around likely would note that the newly calculated APR is higher than the bank’s listed interest rate, giving the banks an unfair advantage. Right now, it’s harder for banks to compete with what brokers offer, Perry said.
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