H.R.3244 - Capital Access for Small Businesses Harmonization Act; CASH Act (119th Congress)
Summary
H.R. 3244, the Capital Access for Small Businesses Harmonization Act (CASH Act), aims to enhance transparency in factoring facility agreements for small businesses. It mandates that providers of these agreements disclose key information to small businesses when the aggregate dollar amount of factoring transactions is less than $500,000. The bill also includes a federal preemption clause, preventing states from imposing additional or inconsistent requirements.
Expected Effects
The bill will likely lead to small businesses being better informed about the terms and conditions of factoring agreements. This could reduce the risk of small businesses entering into unfavorable agreements due to a lack of understanding. The federal preemption clause will standardize disclosure requirements across states.
Potential Benefits
- Increased transparency in factoring agreements for small businesses.
- Small businesses will have a clearer understanding of fees, reserves, and other terms.
- Standardized disclosure requirements across states due to federal preemption.
- Potentially reduces the risk of small businesses entering into unfavorable agreements.
- May foster greater trust between small businesses and factoring providers.
Most Benefited Areas:
Potential Disadvantages
- The $500,000 threshold might exclude some small businesses from these disclosure requirements.
- The federal preemption clause could limit states' ability to address specific local concerns related to factoring agreements.
- The bill's effectiveness depends on the enforcement of the disclosure requirements.
- There may be compliance costs for factoring providers.
- The definition of 'factoring transaction' may be subject to interpretation, leading to potential disputes.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) by regulating interstate commerce related to factoring transactions. The federal preemption clause is also consistent with the Supremacy Clause (Article VI, Clause 2), which establishes that federal law is supreme to state law when there is a conflict. The bill does not appear to infringe upon any individual liberties or rights protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).