Congressman Lucas introduced the Capital Access for Small Businesses Harmonization Act or the CASH Act. The CASH ACT will establish clear disclosures of key terms that factors can provide to small businesses at the time of establishment of the factoring facility. The Act would expressly preempt any state laws applying different disclosure standards to factoring transactions.

“The American Factoring Association (AFA) is grateful for Congressman Lucas’ introduction of the Capital Access for Small Businesses Harmonization Act or the CASH Act,” said Robyn Barrett, President of the AFA. “Congressman Lucas understands how vital the factoring industry is to our nation’s small businesses and that often factors are small businesses themselves. Many of the various state disclosure laws popping up around the country are unworkable for factors, putting them in jeopardy of being out of compliance and to litigation, and most importantly, are threatening much needed access to capital for small businesses. The factoring industry commends Rep. Lucas’ legislation that will create one national workable solution that allows factors to provide accurate disclosures to small businesses that need access to capital to help their businesses grow.”

The CASH Act tackles the burdensome and potentially litigious issue of one-size-fits-all financial disclosure laws, which pose challenges for the factoring industry. In 2018, state disclosure laws started to get enacted, with California being the first state to enact a law that would impact how factoring companies operated with their customers if doing business in the state. Since then, in nearly half of the state legislatures across the country, similar legislation has been introduced, creating a wildfire-like effect with the AFA needing to defend against state disclosure laws popping up around the country.