1 00:00:04,560 --> 00:00:06,630 Jerry Nemorin: EI'd like to announce the next panel. It's a 2 00:00:06,630 --> 00:00:10,020 discussion on innovations in FinTech in debt relief, 3 00:00:10,890 --> 00:00:15,930 moderated by John Mack McNamara, Assistant Director in consumer 4 00:00:15,930 --> 00:00:18,750 credit payments and deposits. John, take it away. 5 00:00:19,950 --> 00:00:22,590 John McNamara: Thank you, Vanessa. And I am on. Yeah, 6 00:00:22,620 --> 00:00:25,620 sounds like I am great. It's I have to tell you, I'm well 7 00:00:25,620 --> 00:00:30,450 pleased to be moderating this panel today on innovation in the 8 00:00:30,450 --> 00:00:34,470 in the debt settlement debt relief space. And through the 9 00:00:34,470 --> 00:00:38,040 Bureau's market monitoring and outreach program, we've become 10 00:00:38,070 --> 00:00:40,410 aware of a number of players in the space. So it's been my 11 00:00:40,410 --> 00:00:43,410 pleasure to meet these gentlemen. And I'll basically 12 00:00:43,410 --> 00:00:46,290 just briefly introduce them. And I'll let each of them talk a 13 00:00:46,290 --> 00:00:48,390 little bit about their background when it comes to 14 00:00:48,390 --> 00:00:52,200 innovation. And then we'll go through a structured discussion 15 00:00:52,200 --> 00:00:55,140 to talk about what brought them to the space and what they're 16 00:00:55,170 --> 00:00:58,410 they're offering in terms of providing consumers with more 17 00:00:58,410 --> 00:01:02,550 options when they're faced with staggering levels of debt. So to 18 00:01:02,550 --> 00:01:07,620 my immediate left is Itzik Cohen, CEO of Pazin. Ed Harycki, 19 00:01:07,950 --> 00:01:13,530 founder and CEO of Creditly, Alex Mooradian, CEO of Resolve 20 00:01:13,530 --> 00:01:17,370 Innovations, and on the far end is Jerry Nemorin, who's founder 21 00:01:17,370 --> 00:01:19,560 and CEO of LendStreet. So I think what we have here are 22 00:01:19,560 --> 00:01:24,390 actually four CEOs and four founders of businesses in the 23 00:01:24,390 --> 00:01:27,960 space. So we'll basically start with you, if you could talk a 24 00:01:27,960 --> 00:01:30,630 little bit about your background and relevant background. 25 00:01:30,990 --> 00:01:34,350 Itzik Cohen: Sure. Because basketball is not relevant here. 26 00:01:34,380 --> 00:01:36,330 John McNamara: Although you're free to share that if you like. 27 00:01:38,520 --> 00:01:41,610 Itzik Cohen: Itzik Cohen, I'm CEO of Pazin which is not 28 00:01:41,610 --> 00:01:45,900 operating in the debt settlement space. But for two years from 29 00:01:45,900 --> 00:01:50,430 2016 to 18. I ran Beyond Finance is a debt settlement company for 30 00:01:50,430 --> 00:01:53,610 profit. Prior to that there I was Chief Business Officer of 31 00:01:53,610 --> 00:01:58,320 Prosper Marketplace. So I've been creditor, lender, and tried 32 00:01:58,320 --> 00:02:00,810 to innovate in the debt settlement space, which gave me 33 00:02:01,320 --> 00:02:06,930 a lot of insight into the market their problems, their friction, 34 00:02:06,930 --> 00:02:12,660 and potential solutions to help improve the outcomes for 35 00:02:12,690 --> 00:02:18,090 consumers also have to know to have an interest in credibly 36 00:02:18,090 --> 00:02:25,020 success because I am very much friends and advisor to Ed so 37 00:02:25,320 --> 00:02:25,980 disclose that. 38 00:02:26,430 --> 00:02:26,850 John McNamara: Thank you. 39 00:02:29,460 --> 00:02:35,460 Ed Harycki: Ed Haryicki founder and CEO of Creditly, Creditly is 40 00:02:35,490 --> 00:02:38,550 I would describe it as a data and technology platform that we 41 00:02:38,550 --> 00:02:42,240 are building to really partner with lenders and credit 42 00:02:42,240 --> 00:02:47,100 counselors to sort of bring more effective, I guess, simpler, and 43 00:02:47,100 --> 00:02:51,210 more cost effective debt relief solutions to the market. I don't 44 00:02:51,210 --> 00:02:53,400 come from the debt relief industry. I've actually been on 45 00:02:53,400 --> 00:02:56,850 the lending side for several decades, I've worked at some of 46 00:02:56,850 --> 00:03:02,370 the large credit card companies. And prior to to creditly, I've 47 00:03:02,370 --> 00:03:05,250 actually started two other fintechs. One was a consumer 48 00:03:05,250 --> 00:03:09,180 credit card company in the UK, that was acquired by a bank 49 00:03:09,180 --> 00:03:14,610 there. And then most recently, I I built another fintech, which 50 00:03:14,610 --> 00:03:18,420 was a small business lending platform, and that was recently 51 00:03:18,840 --> 00:03:25,620 acquired by Pay Pal. And as I was in retirement, I stumbled on 52 00:03:25,620 --> 00:03:28,260 debt relief, I was helping some friends of the family trying to 53 00:03:28,290 --> 00:03:31,560 get some people out of debt and went through all the processes 54 00:03:31,560 --> 00:03:34,650 and I saw how challenging it was. And I just felt there was 55 00:03:34,920 --> 00:03:38,730 opportunities to use current data and technology to come up 56 00:03:38,730 --> 00:03:41,820 with some better and more cost effective solutions to help 57 00:03:41,850 --> 00:03:42,630 consumers. 58 00:03:43,110 --> 00:03:43,980 John McNamara: Thanks, Alex. 59 00:03:45,000 --> 00:03:47,250 Alex Mooradian: My name is Alex Mooradian. I'm the CEO of 60 00:03:47,250 --> 00:03:51,390 Resolve. Resolve is an online platform designed specifically 61 00:03:51,390 --> 00:03:54,000 for consumers who are experiencing financial distress. 62 00:03:54,540 --> 00:03:58,200 What we do is we try to act as their their guide out of debt, 63 00:03:58,230 --> 00:04:01,320 we help them evaluate different debt relief options, we give 64 00:04:01,320 --> 00:04:04,980 them a free credit score. We have budgeting tools, tools to 65 00:04:04,980 --> 00:04:07,740 help cut their expenses as well. So we're really trying to take a 66 00:04:07,740 --> 00:04:11,760 holistic view for the consumer. My background is actually in 67 00:04:11,760 --> 00:04:14,610 finance. I was a private equity investor for the first 10 years 68 00:04:14,610 --> 00:04:17,430 of my career, and then have started a few different 69 00:04:17,430 --> 00:04:20,550 companies as a technology entrepreneur. Similar to 70 00:04:20,550 --> 00:04:24,180 everybody on this the panel up here. A couple of years ago, I 71 00:04:24,180 --> 00:04:26,730 didn't know what debt relief was, wasn't until meeting a 72 00:04:26,730 --> 00:04:29,310 couple of bankruptcy attorneys and learning about the 73 00:04:29,310 --> 00:04:32,220 challenges of distressed that we started to peel back the onion 74 00:04:32,220 --> 00:04:34,320 and learn a little bit about what's the difference between 75 00:04:34,320 --> 00:04:39,000 debt relief, debt settlement, DMPs debt, like all these 76 00:04:39,000 --> 00:04:41,490 different acronyms that are out there that are really confusing 77 00:04:41,490 --> 00:04:44,190 consumers. So I'm looking forward to an engaging panel 78 00:04:44,190 --> 00:04:44,460 today. 79 00:04:44,700 --> 00:04:45,810 John McNamara: Thanks, Alex. Jerry. 80 00:04:46,679 --> 00:04:50,849 Jerry Nemorin: Hi, Jerry Nemorin, founder and CEO of 81 00:04:50,849 --> 00:04:56,129 LendStreet. Similarly, I discovered the debt relief space 82 00:04:56,129 --> 00:05:00,239 back in 2008, while working on Wall Street and helping major 83 00:05:00,239 --> 00:05:04,259 companies restructure their debt And reading every day on the 84 00:05:04,259 --> 00:05:08,099 paper how consumers who were experiencing financial distress 85 00:05:08,129 --> 00:05:12,029 didn't have a comprehensive solution to really re engage, 86 00:05:12,029 --> 00:05:15,899 rebuild their credit and find the final product that was 87 00:05:15,899 --> 00:05:19,109 comprehensive and helped them relieve their debt. So at 88 00:05:19,109 --> 00:05:22,649 LendStreet, we help consumers, restructure their debt, we work 89 00:05:22,799 --> 00:05:27,659 with debt relief companies. And we provide a loan that helps 90 00:05:27,659 --> 00:05:31,049 accelerate the settlements. So rather than 48 month program, 91 00:05:31,049 --> 00:05:35,429 where they remain delinquent, we accelerate the funding, we 92 00:05:35,429 --> 00:05:37,409 provide the funding to accelerate the settlements with 93 00:05:37,409 --> 00:05:40,589 the creditors, as well as pay the fees to those settlement 94 00:05:40,589 --> 00:05:43,920 agencies, and help them rebuild and re engage the system much 95 00:05:43,920 --> 00:05:44,699 John McNamara: Great. The next question, most of you touched on 96 00:05:44,699 --> 00:05:45,089 quicker. 97 00:05:46,620 --> 00:05:49,950 this a little bit. But the next question is, I'd like to pull on 98 00:05:49,950 --> 00:05:53,490 that thread a little bit more. What drew you into this space? 99 00:05:53,520 --> 00:05:57,300 Or maybe asked maybe phrased another way, if this was how 100 00:05:57,300 --> 00:06:01,140 your your thinking evolved? What market inefficiencies led you to 101 00:06:01,170 --> 00:06:03,720 jump into this space? And I think it's time we'll start with 102 00:06:03,720 --> 00:06:05,010 Jerry and work back towards me. 103 00:06:05,040 --> 00:06:09,870 Jerry Nemorin: Sure. So back in 2008, I was working on Wall 104 00:06:09,870 --> 00:06:15,390 Street. And a lot of the work we were doing then was helping 105 00:06:15,390 --> 00:06:19,920 major companies negotiate or buy back their debt at a significant 106 00:06:19,920 --> 00:06:23,940 discount during the crisis to help maintain the solvency and 107 00:06:23,940 --> 00:06:26,280 restructure their right size, their debt to what their 108 00:06:27,180 --> 00:06:30,990 capability capacity was. And so thinking through what we were 109 00:06:30,990 --> 00:06:34,530 doing, and banking for major companies and thinking, how do 110 00:06:34,530 --> 00:06:39,030 we provide the same set of comprehensive solutions to 111 00:06:39,030 --> 00:06:42,840 consumers. And reading in the paper every day, how consumers 112 00:06:42,840 --> 00:06:46,140 were, who were financially distressed, were being taken 113 00:06:46,140 --> 00:06:49,740 advantage of, by various companies that were in the space 114 00:06:49,740 --> 00:06:53,910 that were promising relief, but couldn't provide it. And one of 115 00:06:53,910 --> 00:06:57,330 the things that I read was the lack of and the reason most of 116 00:06:57,330 --> 00:07:00,690 these consumers were falling into this trap, was because they 117 00:07:00,690 --> 00:07:04,290 didn't have access to capital to enable them to settle and pay 118 00:07:04,290 --> 00:07:08,430 off their debt with their creditors. And at the time, I 119 00:07:08,430 --> 00:07:14,160 had, I had been an investor on prosper, lending my own capital, 120 00:07:14,520 --> 00:07:18,510 and decided, well, there needs to be a solution that actually 121 00:07:18,510 --> 00:07:23,700 acknowledges that the consumer at the moment of distress, still 122 00:07:23,700 --> 00:07:28,530 has the willingness to pay just may not have the capacity. And 123 00:07:28,530 --> 00:07:32,160 so why not create a product that actually becomes a workout loan, 124 00:07:32,430 --> 00:07:35,850 rather than keeping this consumer in a program that's 48 125 00:07:35,850 --> 00:07:40,860 months, keeping them delinquent, and not resolving, providing the 126 00:07:40,860 --> 00:07:44,130 true solution for for helping them get out of debt, and also 127 00:07:44,130 --> 00:07:47,670 helping the creditors recover as much capital as possible as 128 00:07:47,670 --> 00:07:51,900 quickly as possible, rather than elongated process or selling 129 00:07:51,900 --> 00:07:57,690 their bad debt to debt buyers. And so for me personally, it was 130 00:07:57,690 --> 00:08:01,200 something that I witnessed growing up from families and 131 00:08:01,200 --> 00:08:04,800 friends and, and thought there had to be a better solution. And 132 00:08:04,800 --> 00:08:08,580 so, you know, really what we aim to do was bridge the capacity in 133 00:08:08,580 --> 00:08:11,190 the intent. The consumer certainly had the intent 134 00:08:11,730 --> 00:08:14,820 capacity was in there. So let's right size, the debt to what 135 00:08:14,820 --> 00:08:19,260 their capacity is, and provide the creditors a path out of the 136 00:08:19,380 --> 00:08:22,800 original debt and give the consumer a path to rebuild their 137 00:08:22,800 --> 00:08:24,990 credit score, and get back into the system. 138 00:08:25,920 --> 00:08:26,700 John McNamara: Great, thank you. 139 00:08:28,350 --> 00:08:31,470 Alex Mooradian: So, as an entrepreneur, we're all looking 140 00:08:31,470 --> 00:08:35,790 for our big problems to solve. And so I got into this space, 141 00:08:35,790 --> 00:08:38,760 when I learned that 10s of millions of Americans are 142 00:08:38,760 --> 00:08:41,490 struggling, right, there's like 70 million people in the US 143 00:08:41,490 --> 00:08:45,450 today who have a debt that's in the collections process. So 144 00:08:45,450 --> 00:08:49,320 that's a really big number. And when you look at those consumers 145 00:08:49,320 --> 00:08:52,350 that are experiencing distress, and you think about the 146 00:08:52,350 --> 00:08:54,660 financial tools and services that are out there, for those 147 00:08:54,660 --> 00:08:57,960 folks, there really is no place that a consumer who has 148 00:08:57,960 --> 00:09:01,110 mountains and mountains of debt can go to get unbiased financial 149 00:09:01,110 --> 00:09:04,290 advice. There's no Charles Schwab designed for, for 150 00:09:04,290 --> 00:09:10,860 distress. And so not only that, when you think about a consumer 151 00:09:10,860 --> 00:09:13,410 who's in distress, and is going online, looking for help, 152 00:09:13,410 --> 00:09:16,110 there's a whole host of predatory companies out there 153 00:09:16,140 --> 00:09:18,900 that are looking to take, take advantage of those consumers. 154 00:09:19,440 --> 00:09:22,920 And it spans credit repair companies. The topic of debt 155 00:09:22,920 --> 00:09:25,320 relief, obviously, is one of the things that we're we're focused 156 00:09:25,320 --> 00:09:29,520 a little bit on here today. But when you when we started before 157 00:09:29,520 --> 00:09:32,310 we even started the business, we talk to consumers about their 158 00:09:32,430 --> 00:09:34,980 path forward, and how are they going to make that decision? And 159 00:09:34,980 --> 00:09:38,040 what you what we heard over and over was, there's all these 160 00:09:38,040 --> 00:09:41,850 things out there. I don't know which of these is designed for 161 00:09:41,850 --> 00:09:44,280 me, which which is the right thing to do. They don't know 162 00:09:44,280 --> 00:09:48,570 what any of these terms mean. On top of that, they've been 163 00:09:48,600 --> 00:09:51,900 extended credit well beyond what they should have been. They 164 00:09:51,900 --> 00:09:54,540 don't know what APR means. They don't know how compounding 165 00:09:54,540 --> 00:09:57,030 interest works. And so they're really in this very difficult 166 00:09:57,030 --> 00:10:01,440 financial situation. You know, And on top of that, one of the 167 00:10:01,440 --> 00:10:04,950 things that you you look for as an entrepreneur as well is you 168 00:10:04,950 --> 00:10:07,680 kind of look for a villain, right? Who are we going up 169 00:10:07,680 --> 00:10:11,760 against? Who are we disrupting? And, you know, to the topic of 170 00:10:11,760 --> 00:10:14,730 today's conversation, you know, we looked at a lot of the things 171 00:10:14,970 --> 00:10:18,450 that were happening specifically in debt settlement and said, We 172 00:10:18,450 --> 00:10:21,990 think there is an opportunity, as part of this larger platform 173 00:10:21,990 --> 00:10:24,900 that we're building to address one of these, one of these 174 00:10:24,900 --> 00:10:28,470 needs. And so I know we're going to dive in a little bit more 175 00:10:28,470 --> 00:10:33,480 today. But on the surface, the product of debt settlement is an 176 00:10:33,480 --> 00:10:36,390 amazing product, right? When you think about the experience of a 177 00:10:36,390 --> 00:10:40,470 consumer, it's a pre charge off option, it's a single payment, 178 00:10:40,500 --> 00:10:43,410 all of their debts are included, these companies have done 179 00:10:43,410 --> 00:10:46,230 billions of dollars of settlements with creditors. And 180 00:10:46,230 --> 00:10:48,660 so that consumer goes into this and says, this is like the 181 00:10:48,660 --> 00:10:51,600 magical solution that they're looking for. Now know what the 182 00:10:51,600 --> 00:10:54,780 consumer doesn't understand. They don't really understand the 183 00:10:54,780 --> 00:10:57,090 fees, they don't understand how the program works, they don't 184 00:10:57,090 --> 00:10:59,490 know that a lot of people get sued during the course of this 185 00:10:59,490 --> 00:11:04,680 process. And so as you peel back the onion and think about what 186 00:11:04,680 --> 00:11:07,980 is actually happening this as an entrepreneur is like the best 187 00:11:07,980 --> 00:11:11,670 thing, tons and tons of people, millions of people, we can 188 00:11:11,670 --> 00:11:15,810 transform their lives by helping give them the proper advice and 189 00:11:15,810 --> 00:11:19,320 guidance through technology. And there's a big industry that we 190 00:11:19,320 --> 00:11:21,600 don't like what they're doing that we can be that we can be 191 00:11:21,600 --> 00:11:22,740 disruptive in the meantime. 192 00:11:23,860 --> 00:11:24,880 John McNamara: Thanks, Ed. 193 00:11:26,250 --> 00:11:33,180 Ed Harycki: So I'd say that the way I approached the market is I 194 00:11:33,180 --> 00:11:38,100 spent a good six to nine months, speaking to everybody I could 195 00:11:38,100 --> 00:11:41,730 about the industry to really, you know, to learn it. And so I 196 00:11:41,970 --> 00:11:46,260 spoke with a lot of large credit card lenders spoke with credit 197 00:11:46,260 --> 00:11:51,180 counseling, attended conferences and forums, John, you know, was 198 00:11:51,180 --> 00:11:55,260 that some of those, and I wanted to sort of really figure out all 199 00:11:55,260 --> 00:11:59,040 the key pain points, because I didn't feel any solution in the 200 00:11:59,040 --> 00:12:02,640 market solved them all solved one, maybe two, but there's a 201 00:12:02,640 --> 00:12:07,440 lot of things to solve. And the key pain points that we were 202 00:12:07,440 --> 00:12:13,740 looking at was just a very slow debt resolution process. I mean, 203 00:12:13,740 --> 00:12:15,960 when customers get into trouble, they want an answer, and they 204 00:12:15,960 --> 00:12:18,780 want it quick, and they want to get it solved. They don't want 205 00:12:18,780 --> 00:12:21,240 to wait a few weeks to get it solved. And they clearly don't 206 00:12:21,240 --> 00:12:23,640 want to wait years to know that these things are all going to 207 00:12:23,640 --> 00:12:28,200 get solved. The cost was deemed excessive by a lot of parties. 208 00:12:28,470 --> 00:12:31,650 And from a lender standpoint, they really wanted to work with 209 00:12:31,650 --> 00:12:34,530 borrowers, but they're getting forced to accept proposals 210 00:12:34,530 --> 00:12:37,950 without a lot of validation of the data below it. So they 211 00:12:37,950 --> 00:12:41,460 really want, you know, some verification of the information. 212 00:12:42,060 --> 00:12:46,290 And so, you know, so we decided to try to come up with a new 213 00:12:46,290 --> 00:12:48,660 business model and approach that a little bit differently. And I 214 00:12:48,660 --> 00:12:52,260 guess the closest what I would liken it to is, we're all very 215 00:12:52,260 --> 00:12:56,760 familiar with instant credit approval models that the large 216 00:12:56,760 --> 00:13:01,440 credit card lenders and unsecured lenders used. And then 217 00:13:01,440 --> 00:13:05,700 we just said, why can't we build a model that provides for an 218 00:13:05,730 --> 00:13:10,230 instant assessment, both cash flow and credit, so we can 219 00:13:10,260 --> 00:13:16,590 instantly evaluate the capacity of a borrower to pay their debts 220 00:13:16,590 --> 00:13:21,900 when they come due. And provided there is a verified, you know, 221 00:13:21,900 --> 00:13:26,490 needs assessment, that we can provide a instant, debtt 222 00:13:26,520 --> 00:13:29,700 resolution outcome for a customer, so it's settled 223 00:13:29,700 --> 00:13:32,880 immediately. And so that was really the foundation of sort of 224 00:13:32,880 --> 00:13:36,060 what we built. And we decided that, you know, trying to build 225 00:13:36,060 --> 00:13:39,030 these types of tools and partnering with lenders and 226 00:13:39,030 --> 00:13:41,100 credit counseling is probably the best way to offer them 227 00:13:41,100 --> 00:13:44,280 because they're already engaging with these consumers every 228 00:13:44,280 --> 00:13:44,910 single day. 229 00:13:46,320 --> 00:13:47,370 John McNamara: Thanks. Itzik 230 00:13:48,380 --> 00:13:55,550 Itzik Cohen: Boy, I think when I kind of analyze the market, I 231 00:13:55,550 --> 00:13:57,680 think there are three things that kind of come to mind. First 232 00:13:57,680 --> 00:14:00,170 of all, there's just too much friction in the market between 233 00:14:00,890 --> 00:14:05,240 the debts for profit debt settlement companies, and the 234 00:14:05,240 --> 00:14:10,460 banks or creditors. And it's fueled by lack of trust, and I 235 00:14:10,460 --> 00:14:15,710 think, some bad experiences. I think the other thing that is a 236 00:14:15,710 --> 00:14:19,550 problem is misaligned, compensations that essentially, 237 00:14:20,150 --> 00:14:24,200 you know, if you're getting a percentage of a fee of the debt, 238 00:14:24,200 --> 00:14:27,710 you enroll into the program, your motivation is to enroll 239 00:14:27,710 --> 00:14:31,880 more debt, rather than just particularly address each 240 00:14:31,880 --> 00:14:36,080 customer's problem individually, individually. So that's another 241 00:14:36,080 --> 00:14:40,490 problem that I think, you know, enhances the lack of trust in 242 00:14:40,490 --> 00:14:44,240 the marketplace. And the third thing, you know, this is a 243 00:14:44,570 --> 00:14:46,970 typical problem where if you're a hammer, everything looks like 244 00:14:46,970 --> 00:14:51,890 a nail. You know, that forgiveness is a wonderful tool 245 00:14:51,890 --> 00:14:56,270 to some people. But it's not the only problem. They don't use 246 00:14:56,270 --> 00:14:58,430 solution. And I think that it is a situation where we're 247 00:14:58,430 --> 00:15:03,140 consumers looking for a solution. If they go to a 248 00:15:03,200 --> 00:15:07,250 typical company with a product, that company will convince you 249 00:15:07,250 --> 00:15:10,310 that that product is the best thing for you. And to think that 250 00:15:10,340 --> 00:15:13,100 there's less of modeling involved, we're in the 21st 251 00:15:13,100 --> 00:15:15,710 century with a lot of model modeling and predictive 252 00:15:16,190 --> 00:15:19,610 analytics that can probably guide you towards what is the 253 00:15:19,640 --> 00:15:22,250 ultimate solution that you should probably employ in this 254 00:15:22,250 --> 00:15:26,030 particular problem. Rather than having a salesperson convince 255 00:15:26,030 --> 00:15:28,430 someone that this is the right the right thing for them to do, 256 00:15:28,460 --> 00:15:33,260 considering their compensation is tied to that. So I think that 257 00:15:33,260 --> 00:15:39,290 there's, in order to resolve those problems that eventually 258 00:15:39,920 --> 00:15:42,350 lead to a very poor customer experience, where they're 259 00:15:42,350 --> 00:15:45,110 getting harassed by creditors, their credit is falling, they 260 00:15:45,110 --> 00:15:49,790 can get sued. And it's an expensive process, the trees can 261 00:15:49,790 --> 00:15:55,310 vary between 20 to 25%. I think that there's, there are clear 262 00:15:55,310 --> 00:15:59,690 ways that both creditors and that segment companies, or the 263 00:15:59,690 --> 00:16:03,950 whole debt relief industry as a whole can adopt, and so it can 264 00:16:03,950 --> 00:16:08,150 come as you know, because of regulations, or we can come 265 00:16:08,150 --> 00:16:14,360 because of just it's better business. But I think that until 266 00:16:14,360 --> 00:16:18,800 now, you didn't see a lot of technology based VCs invest into 267 00:16:18,800 --> 00:16:23,060 space. And what makes me feel really happy about what's going 268 00:16:23,060 --> 00:16:26,960 on here is now that venture capitalists, we invest in 269 00:16:26,960 --> 00:16:30,500 technology and innovation, who expect their entrepreneurs like 270 00:16:30,530 --> 00:16:34,160 Alex net to swing through defenses and kind of disrupt the 271 00:16:34,160 --> 00:16:37,430 industry rather than go for cash flow, and kind of accept the 272 00:16:37,430 --> 00:16:43,400 status quo. It's happening. So I think that that's another angle 273 00:16:43,400 --> 00:16:46,370 that will probably drive more innovation space and more 274 00:16:46,370 --> 00:16:49,250 disruption or innovation. 275 00:16:49,900 --> 00:16:51,970 John McNamara: Actually, Itzik that anticipated my next 276 00:16:51,970 --> 00:16:55,390 question, so so great segue. The next two questions are about 277 00:16:55,390 --> 00:16:59,980 important stakeholders for you. As fintech founders, obviously 278 00:16:59,980 --> 00:17:02,650 investors are incredibly important to you, and I'm sure 279 00:17:02,650 --> 00:17:05,830 you spend more than a minute thinking about them on an hourly 280 00:17:05,830 --> 00:17:12,340 basis. Are investors interested in this space? And if so, what 281 00:17:12,340 --> 00:17:15,580 what brings them in? I know you're interested in solving 282 00:17:15,580 --> 00:17:18,460 problems in the space, but but can you get investment money to, 283 00:17:18,790 --> 00:17:21,160 to build out develop, grow your businesses? 284 00:17:21,190 --> 00:17:23,530 Itzik Cohen: So let me just start, because it's kind of 285 00:17:23,590 --> 00:17:27,430 continuing my thought here, if you don't mind. Beyond Finance a 286 00:17:27,430 --> 00:17:30,340 company I started until 16, you know, we went with a more 287 00:17:30,340 --> 00:17:34,810 traditional private equity type of investor who expects, you 288 00:17:34,810 --> 00:17:38,380 know, certain cash flow, and they don't take chances 289 00:17:38,380 --> 00:17:41,170 regarding the business model, the business model is set, you 290 00:17:41,170 --> 00:17:44,380 know, it's more about, can you feel more funnel more dollars 291 00:17:44,380 --> 00:17:48,100 and get more profits at the end of the day, which is fine. But 292 00:17:48,100 --> 00:17:52,090 it doesn't drive innovation. Right. And so I chose the wrong 293 00:17:52,090 --> 00:17:55,900 investors, in my case, if, if you want to innovate and 294 00:17:55,900 --> 00:17:59,680 disrupt, I think that I'm gonna let Ed and Alex talk about it, 295 00:17:59,680 --> 00:18:02,980 because that these are the these are their companies. But I think 296 00:18:02,980 --> 00:18:05,380 that their first set of investors are expecting 297 00:18:05,380 --> 00:18:08,890 different outcomes, and are investing in different type of 298 00:18:08,950 --> 00:18:09,880 mode of operation. 299 00:18:11,290 --> 00:18:17,470 Ed Harycki: Yeah, so I'd say that, you know, clearly, there's 300 00:18:17,470 --> 00:18:21,670 lots of private equity investors that will invest in lots of 301 00:18:21,670 --> 00:18:26,920 things that make lots of money. In terms of the type of 302 00:18:26,920 --> 00:18:31,720 investors I wanted to speak to, they're very focused on changing 303 00:18:31,720 --> 00:18:34,930 the market in a way that's really better for consumers 304 00:18:34,960 --> 00:18:39,070 providing a much better, better product. And so if we would have 305 00:18:39,730 --> 00:18:42,070 gone to the market and said, Well, we're offering a product 306 00:18:42,070 --> 00:18:44,110 that looks a little like everything that's out there, but 307 00:18:44,110 --> 00:18:46,840 the price is just a little bit less, it's just a little bit 308 00:18:46,840 --> 00:18:50,320 faster, there's no way I would have raised the money from the 309 00:18:50,320 --> 00:18:54,160 types of investors I did. But, you know, when we talked about 310 00:18:54,160 --> 00:18:58,480 what we were doing, you know, we were discussing the opportunity 311 00:18:58,480 --> 00:19:02,890 to build a model that was not incentivized on how large in 312 00:19:02,890 --> 00:19:04,900 debt, you could that you'd enroll where you're making a 313 00:19:04,900 --> 00:19:08,380 commission on it, it was really more of a SAS type of a model 314 00:19:08,380 --> 00:19:11,260 where it's sort of a flat rate, like a data and technology 315 00:19:11,260 --> 00:19:14,740 model. So you could serve as everybody. And that would 316 00:19:14,800 --> 00:19:17,980 eliminate a lot of these sort of perverse incentives to be trying 317 00:19:17,980 --> 00:19:20,680 to enrolling lots of consumers who have sort of a lot more 318 00:19:20,680 --> 00:19:24,790 debt. And so provided, I think that you're building a model 319 00:19:24,790 --> 00:19:28,120 that you're really sort of changing the game, applying that 320 00:19:28,120 --> 00:19:32,650 and technology in sort of new and interesting ways. Trying to 321 00:19:32,650 --> 00:19:35,530 make it sort of fair and equitable for all parties and 322 00:19:35,530 --> 00:19:38,560 sort of really doing the right thing. I think you can raise 323 00:19:38,560 --> 00:19:41,530 money, but I will say that, you know, a lot of the top tier 324 00:19:41,530 --> 00:19:45,490 investors, you know, they care about their reputation equally 325 00:19:45,490 --> 00:19:48,760 as they do sort of their returns. And so, you know, it's 326 00:19:48,760 --> 00:19:51,850 hard to attract the attention of the top tier folks, just because 327 00:19:51,850 --> 00:19:53,860 when you're in an industry where there has been a lot of 328 00:19:53,860 --> 00:19:57,400 practices that are maybe not completely aboveboard, you sort 329 00:19:57,400 --> 00:19:59,680 of have to really prove that you're doing something new and 330 00:19:59,680 --> 00:20:02,110 different. And, and that you're gonna sort of be on the right 331 00:20:02,110 --> 00:20:02,920 side of history. 332 00:20:03,610 --> 00:20:04,900 John McNamara: Yep. Thanks. Alex. 333 00:20:05,710 --> 00:20:07,990 Alex Mooradian: Yeah, I think our experience is very similar 334 00:20:07,990 --> 00:20:11,890 Ed's in terms of in terms of raising money and the right 335 00:20:11,890 --> 00:20:14,590 types of investors, we we really think of when we're out 336 00:20:14,590 --> 00:20:18,040 fundraising, there's really two different groups, we've got one 337 00:20:18,040 --> 00:20:21,400 group, which are typical venture investors who are looking for 338 00:20:21,580 --> 00:20:26,380 mass disruption, changing the industry, heavily focused on 339 00:20:26,410 --> 00:20:30,850 returns. The reality is, all of these guys are, these investors 340 00:20:30,850 --> 00:20:34,270 are looking to make money, you need to build a big business. At 341 00:20:34,270 --> 00:20:37,870 the same time, there's a growing number of social impact venture 342 00:20:37,870 --> 00:20:41,410 investors that are out there, that still, to be honest, they 343 00:20:41,410 --> 00:20:45,160 still want to make money as well. But they are looking 344 00:20:45,220 --> 00:20:47,590 beyond just the dollars that you're making and want to make 345 00:20:47,590 --> 00:20:50,410 sure that you're doing it in a socially conscience conscious 346 00:20:50,410 --> 00:20:55,750 way. When, when we did our first raise, I probably spent more 347 00:20:55,750 --> 00:21:01,300 time getting to know our investors personally than in any 348 00:21:01,300 --> 00:21:05,980 other business I've ever run before. A lot of the reputation 349 00:21:05,980 --> 00:21:08,680 of the company, they wanted to just make sure that Alex is a 350 00:21:08,680 --> 00:21:11,290 good guy, right? Alex is not all of a sudden going to change the 351 00:21:11,290 --> 00:21:14,830 business model, and start acting like a traditional debt 352 00:21:14,830 --> 00:21:17,200 settlement company that I can't tell you how many times I had 353 00:21:17,200 --> 00:21:21,880 that question where investors would challenge and say, Well, 354 00:21:22,240 --> 00:21:25,210 you can't make the business model working in this new and 355 00:21:25,210 --> 00:21:28,510 innovative way that you're trying to what's going to stop 356 00:21:28,510 --> 00:21:31,840 you from charging 20 to 25% of enrolled debt for somebody who 357 00:21:31,840 --> 00:21:36,520 goes down that path. And in the end, you know, we're out raising 358 00:21:36,520 --> 00:21:39,580 money before we built anything, quite often, it just comes down, 359 00:21:39,610 --> 00:21:41,710 you just have to trust me, right, you're gonna have to get 360 00:21:41,710 --> 00:21:44,230 to know me as a person and decide whether or not you think 361 00:21:44,230 --> 00:21:49,930 that is part of my, my DNA, the team's DNA. Now, we, we spent a 362 00:21:49,930 --> 00:21:54,040 lot of time thinking about what is the brand of resolve or 363 00:21:54,070 --> 00:21:57,730 what's called a public benefit corporation, we try to align 364 00:21:57,730 --> 00:22:01,180 ourselves with others who are mission driven and socially 365 00:22:01,180 --> 00:22:05,830 conscious. And, and we think about that brand, because in 366 00:22:05,830 --> 00:22:08,050 everything that we do everything in terms of the product that we 367 00:22:08,050 --> 00:22:12,280 build the marketing that we do, and and I think that translates 368 00:22:12,310 --> 00:22:16,120 to the venture investment community. And we've got a lot 369 00:22:16,120 --> 00:22:18,400 of folks that, you know, when we went out to raise the first time 370 00:22:18,400 --> 00:22:21,820 that said, like, we don't think it's going to work, and you're 371 00:22:21,820 --> 00:22:24,250 not going to make a lot of money doing it. And that's a little 372 00:22:24,250 --> 00:22:26,980 bit of a self selection process. For us. That's great. Let's go 373 00:22:26,980 --> 00:22:29,860 find somebody who believes in the vision and who also wants to 374 00:22:29,860 --> 00:22:32,140 change who wants to change the world, because as we feel like 375 00:22:32,140 --> 00:22:32,560 we're doing 376 00:22:33,550 --> 00:22:34,480 John McNamara: Right. Jerry. 377 00:22:39,970 --> 00:22:43,570 Jerry Nemorin: Innovation is hard, right, and requires real 378 00:22:43,570 --> 00:22:50,680 capital, I think, and to Ed's point, VCs in general, are 379 00:22:50,680 --> 00:22:57,940 looking for transformative type of technology. And so, and in 380 00:22:57,940 --> 00:23:02,830 this space, you know, there's clearly a need for 381 00:23:02,830 --> 00:23:08,440 transformative products and solutions. I would say I don't 382 00:23:08,500 --> 00:23:13,450 think money is what's going to solve this. So maybe I'll take 383 00:23:13,450 --> 00:23:17,740 the conversation, a different route, we can throw a shit ton 384 00:23:17,740 --> 00:23:21,130 of money against against this problem, until we get everybody 385 00:23:21,130 --> 00:23:25,360 at the table to recognize its real problem. We're not going to 386 00:23:25,360 --> 00:23:29,860 solve this. That's just my view. And ultimately, the guys like 387 00:23:29,860 --> 00:23:35,260 us, who may believe in strongly are fighting every day to try 388 00:23:35,260 --> 00:23:39,730 and solve this real problem that we have in this country will get 389 00:23:39,730 --> 00:23:42,760 swallowed. Because the people who aren't doing it the right 390 00:23:42,760 --> 00:23:47,020 way, will have significantly more access to capital. And 391 00:23:47,020 --> 00:23:50,650 we'll be able to, you know, fund the acquisitions of those 392 00:23:50,650 --> 00:23:53,650 customers in a different way with the right with the 393 00:23:53,650 --> 00:24:00,850 language, they'll just push into the airwaves, they'll just take 394 00:24:00,850 --> 00:24:03,220 suck out all the air in the room, because they'll have the 395 00:24:03,220 --> 00:24:08,770 capital do so. So if this is a capital game, in all honesty, I 396 00:24:08,770 --> 00:24:13,360 think we're going to lose. But if this is a let's solve a 397 00:24:13,360 --> 00:24:17,560 significant problem, because we believe it's the right thing to 398 00:24:17,560 --> 00:24:21,610 do. And we're going to bring the right solutions to the market. 399 00:24:21,700 --> 00:24:24,400 And we're going to make sure that you know, our Northstar is 400 00:24:24,400 --> 00:24:28,570 always the consumer, then we have a path forward to solve a 401 00:24:28,570 --> 00:24:31,720 real significant problem for this country. But it's not a 402 00:24:31,720 --> 00:24:33,580 capital. It's not a capital issue. 403 00:24:34,180 --> 00:24:34,900 John McNamara: Thanks, Jerry. 404 00:24:35,080 --> 00:24:35,950 Alex Mooradian: John, can I just follow him? 405 00:24:35,950 --> 00:24:36,400 John McNamara: Absolutely. 406 00:24:36,400 --> 00:24:39,840 Alex Mooradian: So I think it's really important to recognize 407 00:24:39,870 --> 00:24:43,560 the difficulty of the things that we're trying to do here. So 408 00:24:43,560 --> 00:24:48,660 we are in general, we are we are all using technology. We are 409 00:24:48,660 --> 00:24:53,040 finding ourselves in between, quite often 30 Different 410 00:24:53,040 --> 00:24:55,860 institutions while we're trying to solve a situation for a 411 00:24:55,860 --> 00:24:59,520 consumer. So we've got a whole host of regulatory bodies that 412 00:24:59,520 --> 00:25:02,460 are have rules and regulations that we're trying to weave our 413 00:25:02,460 --> 00:25:06,570 way in between, quite often the consumer has 15 or 20, different 414 00:25:06,570 --> 00:25:10,380 accounts. So just like, let's take a minute here, the average 415 00:25:10,380 --> 00:25:14,550 consumer on our platform has $50,000 worth of debt across 20 416 00:25:14,580 --> 00:25:18,570 or 25. different accounts. And so when you think of what that 417 00:25:18,570 --> 00:25:21,090 consumers life, if somebody on a previous panel talked about the 418 00:25:21,090 --> 00:25:25,410 number of calls and letters coming in, it's, it's not like 419 00:25:25,410 --> 00:25:28,470 the person wakes up and is like, Oh, I have a problem today, and 420 00:25:28,470 --> 00:25:32,640 I want to go solve it. They're like, Oh, no, my mailbox is full 421 00:25:32,640 --> 00:25:36,450 of letters, I'm getting 50 phone calls a day. And I'm just gonna 422 00:25:36,450 --> 00:25:38,760 put my head in the sand because I can't deal with those 423 00:25:38,760 --> 00:25:42,990 situations. And so we are, what we're constantly trying to do is 424 00:25:43,260 --> 00:25:47,970 take the regulatory framework 15, or 20, different creditors 425 00:25:47,970 --> 00:25:52,020 have all do different things. And then a consumer who just is 426 00:25:52,020 --> 00:25:54,570 like, scared, they're embarrassed, they don't know how 427 00:25:54,570 --> 00:25:57,330 to solve their problems. And they're getting bombarded with 428 00:25:57,330 --> 00:26:01,200 all of these different deceptive solutions. And so I completely 429 00:26:01,200 --> 00:26:04,320 agree it is not a capital problem. Money does help, 430 00:26:04,320 --> 00:26:08,160 though. Jerry, right. So having some money allows you to take a 431 00:26:08,160 --> 00:26:12,900 bunch of swings to make things, the solutions, but the right 432 00:26:12,900 --> 00:26:15,900 people are in this room to solve the problem. And it is not, it 433 00:26:15,900 --> 00:26:18,720 is not going to be a money solution. But there is a 434 00:26:18,720 --> 00:26:21,540 fundamental systemic problem here that needs to be addressed. 435 00:26:22,440 --> 00:26:25,050 John McNamara: Great. Thank you. And actually, Jerry, you started 436 00:26:25,050 --> 00:26:27,300 touching on the other really another really important 437 00:26:27,300 --> 00:26:30,240 stakeholder and that would be the consumer. So as you approach 438 00:26:30,240 --> 00:26:34,110 this market, what are the consumers needs in this space? 439 00:26:34,170 --> 00:26:38,550 And then as you deploy product or build product? What do you 440 00:26:38,550 --> 00:26:41,370 feel you need to do to mitigate those any risks that might be 441 00:26:41,370 --> 00:26:44,040 presented to those consumers? And against I'd like to pull on 442 00:26:44,040 --> 00:26:46,680 that thread a little bit more of specific consumer needs in the 443 00:26:46,680 --> 00:26:47,250 space? 444 00:26:48,390 --> 00:26:53,760 Jerry Nemorin: Yeah, I'll take it since I started the thread. I 445 00:26:53,760 --> 00:26:58,170 think Ed's point is spot on, right. And in this day and age, 446 00:26:58,410 --> 00:27:01,710 with data, with the infrastructure, we have 447 00:27:01,710 --> 00:27:08,340 technology infrastructure we have it's it's almost criminal 448 00:27:08,340 --> 00:27:14,490 to not have the ability to engage creditors and create 449 00:27:14,490 --> 00:27:18,090 solutions for consumers instantaneously, because we 450 00:27:18,090 --> 00:27:22,440 shouldn't have this sort of barriers. I mean, certainly 451 00:27:22,470 --> 00:27:25,140 countries don't have those barriers. When a country is 452 00:27:25,140 --> 00:27:29,010 running out of money. Argentina does it every every 15, 20 453 00:27:29,040 --> 00:27:34,320 years. Right? A company doesn't have those barriers, right? They 454 00:27:34,350 --> 00:27:37,740 hire lawyer, they engage with the banks, and they negotiate 455 00:27:37,740 --> 00:27:40,620 their debt down and right size it to what their capacity is. 456 00:27:40,950 --> 00:27:43,800 And we call it, you know, Chapter whatever, you want to 457 00:27:43,800 --> 00:27:47,850 call it in bankruptcy code. And they're now they've emerged, 458 00:27:48,120 --> 00:27:51,720 because there was a creditor there that decided to provide 459 00:27:51,720 --> 00:27:56,160 that workout loan and do so. Right. We have made it so hard 460 00:27:56,160 --> 00:28:00,720 for consumers because we believe they have mal intent. And it's 461 00:28:00,720 --> 00:28:05,310 the we we actually lend to these consumers who are in financial 462 00:28:05,310 --> 00:28:09,210 distress. And I can tell you that they're coming in with 70 463 00:28:09,240 --> 00:28:13,770 plus DTIs on a net basis. And for you to sit there and say, 464 00:28:13,800 --> 00:28:17,400 these are consumers who are trying to game the system is not 465 00:28:17,400 --> 00:28:21,060 acknowledging the fact that we have we are over a trillion 466 00:28:21,060 --> 00:28:24,480 dollars in credit card debt, over a trillion six in student 467 00:28:24,480 --> 00:28:29,400 debt, and not you know, in income has stagnated for so 468 00:28:29,400 --> 00:28:34,290 long. And so we have to just acknowledge the reality of the 469 00:28:34,290 --> 00:28:37,470 fact that we are in a situation where we've significantly over 470 00:28:37,470 --> 00:28:41,370 levered American households. And the only solution forward is for 471 00:28:41,370 --> 00:28:45,420 us to get around the table together and say, Okay, how do 472 00:28:45,420 --> 00:28:49,860 we create systems and processes that are not extractive because 473 00:28:49,890 --> 00:28:53,190 we don't believe in an extractive product? Right, but 474 00:28:53,220 --> 00:28:56,820 that are, you know, instantaneous, that is 475 00:28:56,850 --> 00:28:59,850 transparent, and it's a win win win value proposition, the 476 00:28:59,850 --> 00:29:02,670 consumer has to win, the companies that are providing the 477 00:29:02,670 --> 00:29:05,880 services have to win, and the creditors need to also have a 478 00:29:05,880 --> 00:29:08,370 win. And then that's our view. And that's the approach we've 479 00:29:08,370 --> 00:29:12,690 taken. Right? And until we have but but to get to that win win 480 00:29:12,690 --> 00:29:15,900 win value proposition, everybody has to be at the table and 481 00:29:15,900 --> 00:29:20,100 saying, what is it what what's my position? Right. So. 482 00:29:20,490 --> 00:29:22,860 Itzik Cohen: Maybe to answer your question, John, more 483 00:29:22,860 --> 00:29:25,470 specifically, I don't think consumers know what they need. 484 00:29:26,880 --> 00:29:30,900 Consumers are confused. They are they have debt, I mean, 485 00:29:31,170 --> 00:29:35,100 unsecured debt is pretty high right now. And it's manageable, 486 00:29:35,100 --> 00:29:39,930 but because loss rates are not that high, but it's hard if the 487 00:29:40,470 --> 00:29:44,460 total debt is high. But you know, to hear a lot of marketing 488 00:29:45,180 --> 00:29:49,890 that suggest that don't have to pay what they owe in full and 489 00:29:49,890 --> 00:29:52,140 that their creditors are tricking them to think that they 490 00:29:52,140 --> 00:29:58,470 have to pay in full and it's not a trick. So they call thinking 491 00:29:58,470 --> 00:30:02,520 there's they missed something. And of course, a lot of them are 492 00:30:02,520 --> 00:30:06,210 unsophisticated consumers in a been in warning to this program, 493 00:30:06,210 --> 00:30:10,680 I think that this is from a marketing that sediment 494 00:30:10,710 --> 00:30:13,590 practices. But if I look at it from a creditor perspective, 495 00:30:14,100 --> 00:30:17,040 look when I was speeding a few years ago, and I got three 496 00:30:17,040 --> 00:30:18,960 speeding tickets, in four months, I got a letter from the 497 00:30:18,960 --> 00:30:21,420 DMV saying that they're unhappy with my driving record, and 498 00:30:21,420 --> 00:30:24,570 they're concerned, I think that your creditor should do the same 499 00:30:24,570 --> 00:30:28,530 thing. And you know, they have access to their credit to your 500 00:30:28,530 --> 00:30:31,800 credit, every month, they pull your credit from the various 501 00:30:31,800 --> 00:30:34,890 bureaus, they see your other accounts, not just their 502 00:30:34,890 --> 00:30:39,600 account. And if your spending habits are show concern in their 503 00:30:39,600 --> 00:30:41,880 mind, and there's a lot of predictable models, and I can 504 00:30:41,880 --> 00:30:45,450 predict the problem, it's almost like Minority Report, you know, 505 00:30:45,810 --> 00:30:48,480 you can know that it's going to be a problem eventually, with 506 00:30:48,480 --> 00:30:53,700 that, with that consumer, then something needs to happen from 507 00:30:53,700 --> 00:30:56,910 the creditor themselves to either using a third party or 508 00:30:56,910 --> 00:31:00,150 themselves to start working with the customer to eliminate the 509 00:31:00,150 --> 00:31:03,720 problem or prevent them or you can help everybody. But I think 510 00:31:03,720 --> 00:31:06,930 that they gave you credit, they should also be responsible for 511 00:31:07,710 --> 00:31:11,400 the, for your responsible use of your credits, and how you manage 512 00:31:11,400 --> 00:31:14,550 your total accounts, not just there's so I think that, you 513 00:31:14,550 --> 00:31:19,020 know, the this is the idea that a lot of the tech innovation 514 00:31:19,800 --> 00:31:22,380 that I see in the future will be helping to solve that problem 515 00:31:22,440 --> 00:31:25,650 and reduce that friction, because it's going to focus on 516 00:31:25,650 --> 00:31:29,190 people who really need help based on data, not on marketing. 517 00:31:30,390 --> 00:31:33,660 Ed Harycki: So, I agree, they may not always know what they 518 00:31:33,660 --> 00:31:37,380 want, but I think they know what they don't want. And I think 519 00:31:37,440 --> 00:31:39,540 they don't want processes when they're in trouble. They don't 520 00:31:39,540 --> 00:31:43,290 want processes that take weeks, months and years to get, you 521 00:31:43,290 --> 00:31:48,090 know, certainty. I don't think they want to be paying 20 to 25% 522 00:31:48,090 --> 00:31:52,710 fees on top of a bad problem that sometimes, you know, 523 00:31:52,710 --> 00:31:55,920 happens to good people are trying to do the right thing. I 524 00:31:55,920 --> 00:31:59,040 don't think they want to see their credit reports destroyed 525 00:31:59,040 --> 00:32:02,490 during the process. And I think they want to really know what, 526 00:32:02,940 --> 00:32:05,430 what they're in for when they sort of sign up for something. 527 00:32:05,430 --> 00:32:09,030 So a lot more, you know, a lot more transparency. Sure. 528 00:32:10,830 --> 00:32:11,880 John McNamara: Sorry, go ahead Alex. 529 00:32:12,300 --> 00:32:16,200 Alex Mooradian: So, I think it's important to recognize that in 530 00:32:16,200 --> 00:32:20,580 the average consumers life who's having this problem paying their 531 00:32:20,580 --> 00:32:23,910 credit card companies is like, probably number seven on the 532 00:32:23,910 --> 00:32:26,550 list, right? They've they're generally in this situation, 533 00:32:26,550 --> 00:32:30,180 because they've had a medical issue, they've had a job issue. 534 00:32:30,660 --> 00:32:33,000 They've been through a divorce, there's there's generally some 535 00:32:33,000 --> 00:32:37,020 life event that has put them into this particular situation. 536 00:32:37,020 --> 00:32:39,510 Now there's, why don't you probably just know, the stats, 537 00:32:39,510 --> 00:32:43,500 like 60% of Americans can't afford a $600 life expense 538 00:32:43,980 --> 00:32:44,580 emergencies. 539 00:32:44,580 --> 00:32:46,860 Itzik Cohen: 40, 40 can afford 400, right. 540 00:32:46,860 --> 00:32:48,950 John McNamara: Small shocks, small shocks, can cause big 541 00:32:48,950 --> 00:32:49,460 problems. 542 00:32:49,490 --> 00:32:51,800 Alex Mooradian: These folks are like walking along the cliff 543 00:32:51,830 --> 00:32:55,280 already, it just takes a light breeze to kind of push them into 544 00:32:55,310 --> 00:32:58,160 into this world. And so they're worried about their kids, 545 00:32:58,160 --> 00:33:02,240 they're worried about taking care of a loved one. And, and I 546 00:33:02,240 --> 00:33:05,450 think everybody in here probably has a strong educational 547 00:33:05,450 --> 00:33:08,990 background. We know what a budget is, you know how, like, 548 00:33:08,990 --> 00:33:10,970 you might even know what a profit and loss statement is. 549 00:33:10,970 --> 00:33:13,970 But when you talk to the average consumer and take them through a 550 00:33:13,970 --> 00:33:17,300 budgeting exercise, they don't have any idea where they're 551 00:33:17,300 --> 00:33:19,850 spending their money, right? They like the idea of saying to 552 00:33:19,850 --> 00:33:23,870 them, oh, well, you're paying $1,000 per month in interest 553 00:33:23,870 --> 00:33:27,320 charges. And we're gonna reduce that to $800. The person 554 00:33:27,350 --> 00:33:30,830 basically says, that sounds good, like, does that gonna get 555 00:33:30,830 --> 00:33:36,230 them out of the problem, they really have no idea. And so, you 556 00:33:36,230 --> 00:33:39,020 know, I, you're gonna hear kind of a common theme for me today, 557 00:33:39,020 --> 00:33:43,580 where in a world where a consumer is in that experience, 558 00:33:43,580 --> 00:33:46,910 they're looking for the easy button, like, press that button, 559 00:33:46,970 --> 00:33:50,720 make it all go away. And that is what traditional debt settlement 560 00:33:50,720 --> 00:33:54,710 companies have created on the surface, right. So it is the 561 00:33:54,710 --> 00:33:58,310 perfect product that that consumer wants and needs, it 562 00:33:58,310 --> 00:34:01,550 makes the consumer feel like everything is going to go away. 563 00:34:01,970 --> 00:34:04,610 Now, what the consumer doesn't understand is how much in terms 564 00:34:04,610 --> 00:34:07,460 of fees they're going to pay. The consumer doesn't understand 565 00:34:07,460 --> 00:34:10,730 that for every dollar enrolled in the program, 25 cents of that 566 00:34:10,730 --> 00:34:13,790 is going to go to the debt settlement company for like, I'm 567 00:34:13,790 --> 00:34:16,640 not like, let's be realistic, big debt settlement companies 568 00:34:16,730 --> 00:34:19,340 are not negotiating, right? These are Excel files that are 569 00:34:19,340 --> 00:34:22,400 going back and coming back from creditors, like there is no 570 00:34:22,400 --> 00:34:27,170 negotiation process. So we just have to keep reminding ourselves 571 00:34:27,290 --> 00:34:30,920 who the person is that is being impacted. They don't know what 572 00:34:30,920 --> 00:34:33,860 they're signing up for. And frankly, if you're a creditor, 573 00:34:33,890 --> 00:34:36,320 and you're trying to combat the traditional debt settlement 574 00:34:36,320 --> 00:34:39,410 industry, suing that consumer for just not really 575 00:34:39,410 --> 00:34:42,920 understanding is also not the right approach. Right? So we 576 00:34:42,920 --> 00:34:46,850 need to find a solution that looks at the problem and meets 577 00:34:46,850 --> 00:34:50,150 the consumer where they're at. If you think about exactly if 578 00:34:50,150 --> 00:34:53,300 you were in that situation, what are the characteristics of a 579 00:34:53,300 --> 00:34:56,120 solution that you would want? And I gotta tell you, it's not 580 00:34:56,120 --> 00:34:59,600 going to be like taking a course online and getting gaining 581 00:34:59,600 --> 00:35:02,690 financial illiteracy it's like, just take my problem and help me 582 00:35:02,690 --> 00:35:03,470 make it go away. 583 00:35:05,700 --> 00:35:08,790 Jerry Nemorin: Yeah, I would say this is analogous to 584 00:35:08,970 --> 00:35:12,540 prohibitionist what happened when we had very ambition. 585 00:35:13,620 --> 00:35:16,890 People still drink booze, right? It just the price of booze was 586 00:35:16,890 --> 00:35:22,530 higher. So if we really want to make this process transparent, 587 00:35:22,680 --> 00:35:29,340 and you know, and low costs to the consumer, you just got to 588 00:35:29,340 --> 00:35:33,690 create a better, better set of rules, regulations, and 589 00:35:33,690 --> 00:35:36,660 transparency across the board, and everybody has to be at the 590 00:35:36,660 --> 00:35:43,560 table, right? In a situation where, you know, it's not, I'm a 591 00:35:43,560 --> 00:35:47,700 creditor, as well, right. So, you know, I'm in the same shoes. 592 00:35:48,270 --> 00:35:51,930 But when we're in a situation where creditors are saying, 593 00:35:51,930 --> 00:35:55,500 we're going to make make it difficult, because you believe 594 00:35:55,500 --> 00:36:00,510 that it is more hazard, what you actually create is more more 595 00:36:00,510 --> 00:36:04,500 hazard, because to your point, now you're giving rise to these 596 00:36:04,530 --> 00:36:08,880 sets of organizations that are, you know, going to flood the 597 00:36:08,880 --> 00:36:15,120 airwaves with these types of advertising. And that then 598 00:36:15,120 --> 00:36:18,360 ultimately, will take advantage of the fact that you've created 599 00:36:18,390 --> 00:36:23,310 you by virtue of not want, you know, not being willing to 600 00:36:23,310 --> 00:36:27,300 engage the consumer have created a scenario where they feel the 601 00:36:27,300 --> 00:36:32,670 need to have, you know, a white knight. And you've created a 602 00:36:32,670 --> 00:36:36,720 void that somebody else can fill in, unfortunately, and, you 603 00:36:36,720 --> 00:36:39,810 know, look, we live in a capitalistic society, when 604 00:36:39,810 --> 00:36:43,320 there's a need, there's a service, it's, again, no 605 00:36:43,320 --> 00:36:46,470 different than prohibition, you know, when people were providing 606 00:36:46,470 --> 00:36:50,490 booze, no different than tobacco and cigarettes, there's a 607 00:36:50,490 --> 00:36:55,050 demand, there's a need, somebody has to fill that void. And, you 608 00:36:55,050 --> 00:36:59,370 know, you're giving the the perverse incentive for others to 609 00:36:59,370 --> 00:37:06,690 step into that void and fill it. And so I want to say, consumers 610 00:37:07,500 --> 00:37:16,710 are, are the victim of this sort of battle between or this 611 00:37:16,710 --> 00:37:20,460 concept of more hazard, and we only making it worse with them. 612 00:37:20,880 --> 00:37:23,310 We're not putting the consumer first when we think we don't 613 00:37:23,310 --> 00:37:25,680 want to debt, we don't want to settle, okay, you don't want to 614 00:37:25,680 --> 00:37:27,600 settle. So what are you going to do, you're going to charge it 615 00:37:27,600 --> 00:37:29,940 off, and you're gonna sell it off for what 10, 15 cents, or 616 00:37:29,940 --> 00:37:32,730 you're going to hold it on your book. Come on, let's be honest 617 00:37:32,730 --> 00:37:35,280 about that, let's create a solution that actually meets the 618 00:37:35,280 --> 00:37:37,800 consumer where they are, because you know what they wouldn't be 619 00:37:37,800 --> 00:37:41,550 in this situation. If we weren't, if everyone wasn't 620 00:37:41,640 --> 00:37:48,180 pitching this level of access, right? We've over over levered 621 00:37:48,180 --> 00:37:50,790 the consumer. So now let's figure out how to get them to 622 00:37:50,790 --> 00:37:51,660 the right place. 623 00:37:53,160 --> 00:37:54,930 Alex Mooradian: I just wanted to follow up with one thing for 624 00:37:54,930 --> 00:37:58,260 those who are, who don't really understand the world of 625 00:37:58,260 --> 00:38:02,940 distress. So if you are a consumer who is current on your 626 00:38:02,940 --> 00:38:07,500 accounts, there is no less than full balance option out there 627 00:38:07,500 --> 00:38:12,420 available. So you can go to a credit counseling agency, and 628 00:38:12,420 --> 00:38:17,100 pay anywhere from six to 7% APR with fees, that's really up to 629 00:38:17,100 --> 00:38:21,900 like 10 to 11%. There is no less than full balance option there. 630 00:38:22,350 --> 00:38:26,100 And so if you're struggling, and you can't afford to pay 100% of 631 00:38:26,100 --> 00:38:29,730 your debt, the only thing available to you is to go to a 632 00:38:29,730 --> 00:38:32,400 traditional debt settlement company. Right? That's there is 633 00:38:32,400 --> 00:38:36,060 no option if you call your creditors there, or bankruptcy. 634 00:38:36,300 --> 00:38:40,800 Yes. But but you can't call your creditors and have this 635 00:38:40,800 --> 00:38:43,020 conversation with them, they're gonna basically give you a 636 00:38:43,020 --> 00:38:47,400 hardship plan, that's two or 3%. Or they're gonna say, tough 637 00:38:47,400 --> 00:38:50,430 luck. Like, maybe you'll charge off at some point, and then you 638 00:38:50,430 --> 00:38:52,620 can call me and we'll negotiate at that point. But the consumer, 639 00:38:52,620 --> 00:38:55,560 like the consumer doesn't know I just used the word charge off, 640 00:38:55,560 --> 00:38:57,780 right, a consumer doesn't even know what charge off means. 641 00:38:58,620 --> 00:38:58,950 Sure. 642 00:38:58,960 --> 00:39:00,400 John McNamara: And Itzik you had something to say? 643 00:39:00,400 --> 00:39:02,080 Itzik Cohen: No, I just say that, you know, it's not because 644 00:39:03,400 --> 00:39:07,330 creditors don't want to because they're not allowed to, in most 645 00:39:07,330 --> 00:39:12,340 cases by regulation, to do a principal forgiveness before 646 00:39:12,340 --> 00:39:16,030 delinquency or charge off. So there's not just it's not just 647 00:39:16,030 --> 00:39:20,320 the willingness of creditors and banks to work entirely. In some 648 00:39:20,530 --> 00:39:25,000 nice, nice costume earlier today. You have the marketplace 649 00:39:25,000 --> 00:39:27,700 lending Association and banks here. I mean, there are rules 650 00:39:27,700 --> 00:39:31,900 that prohibits them to to give you forgiveness before the 651 00:39:31,900 --> 00:39:32,500 charge off. 652 00:39:32,770 --> 00:39:34,630 Alex Mooradian: That's not entirely true. But. 653 00:39:34,690 --> 00:39:37,840 Itzik Cohen: Anyways, that's what I know. So I'm not gonna 654 00:39:37,840 --> 00:39:41,410 say there are there are, there's a willingness of creditors to 655 00:39:41,410 --> 00:39:44,410 work with you. There are some things that can do things that 656 00:39:44,410 --> 00:39:47,650 cannot do before GA. I think that regulation change in this 657 00:39:47,650 --> 00:39:51,850 space will be helpful, because you know, that would actually 658 00:39:51,910 --> 00:39:57,070 open the door to work directly with creditors in a much more 659 00:39:57,070 --> 00:39:57,850 efficient way. 660 00:39:57,970 --> 00:39:59,920 John McNamara: And it was important earlier to hear that 661 00:39:59,950 --> 00:40:04,960 that some lenders have Prudential's that have safety 662 00:40:04,960 --> 00:40:07,990 and soundness constraints around their loss mitigation options. 663 00:40:07,990 --> 00:40:11,140 We heard a little bit about that today. Some lenders don't, 664 00:40:11,140 --> 00:40:13,540 though some lenders don't have that same safety and soundness 665 00:40:13,540 --> 00:40:16,510 regulator in place. And again, that's why we were really 666 00:40:16,510 --> 00:40:19,990 delighted to have a variety of lenders on the panel earlier. 667 00:40:20,140 --> 00:40:23,560 Hey, Jerry, your your product is somewhat different. And I wanted 668 00:40:23,560 --> 00:40:25,990 to ask a pointed question to you or target your question. 669 00:40:25,990 --> 00:40:27,660 Alex Mooradian: Could we go back to the this that one issue 670 00:40:27,660 --> 00:40:30,360 because I think it's important to recognize with regulators in 671 00:40:30,360 --> 00:40:30,930 the room here. 672 00:40:31,000 --> 00:40:31,270 Alex Mooradian: I think there there are regulatory challenges 673 00:40:31,270 --> 00:40:31,600 John McNamara: Sure. 674 00:40:35,320 --> 00:40:39,310 with settling free charge off debt. But that's not to say that 675 00:40:39,310 --> 00:40:43,060 there aren't other solutions available that creditors can do 676 00:40:43,270 --> 00:40:45,640 to help consumers who are in distress. I just wanted to 677 00:40:45,640 --> 00:40:49,900 clarify that there is flexibility in the world to do 678 00:40:49,900 --> 00:40:52,690 something else. And that's part of the comprehensive 679 00:40:52,750 --> 00:40:54,970 conversation that we should be having, which is what's what's 680 00:40:54,970 --> 00:40:57,430 going to fill the gap other than traditional debt settlement? 681 00:40:57,430 --> 00:41:00,340 John McNamara: Sure. Jerry, your product is somewhat different in 682 00:41:00,340 --> 00:41:05,110 that you actually find consumers or you find a way to lend to 683 00:41:05,110 --> 00:41:07,570 consumers who have a high willingness to pay, but maybe a 684 00:41:07,570 --> 00:41:13,450 lower capacity. And that loans to quicken debt settlements, 685 00:41:13,480 --> 00:41:17,470 shorten the timeframe give the consumer you know, less horizon 686 00:41:17,470 --> 00:41:20,260 risk, you're playing in that space? What are your 687 00:41:20,260 --> 00:41:23,920 observations about this dynamic? And what do you see as the 688 00:41:23,920 --> 00:41:27,580 potential benefits and risks for what you're doing? 689 00:41:29,590 --> 00:41:33,040 Jerry Nemorin: Yeah, so first observation is the consumer 690 00:41:33,040 --> 00:41:38,170 profile is truly Middle America. Right? What was once considered 691 00:41:38,860 --> 00:41:43,900 middle class, the consumers were effectively serving, I call them 692 00:41:43,900 --> 00:41:47,500 the recovering prime. Right? So these are consumers again, 693 00:41:47,560 --> 00:41:51,430 coming in, and we look at debt to income on a on a net basis, 694 00:41:51,430 --> 00:41:55,360 because we're pulling their bank bank accounts and then getting 695 00:41:55,360 --> 00:41:59,290 that basis, and you're talking about 70% on a net basis, right? 696 00:41:59,290 --> 00:42:03,760 I mean, and some come in with 75 plus percent on a net income 697 00:42:03,760 --> 00:42:08,290 basis, which means that 70 plus percent of their monthly income 698 00:42:08,320 --> 00:42:12,460 is going to pay off debt obligations. That's not 699 00:42:12,460 --> 00:42:16,390 sustainable. i There's no way you can make that argument, you 700 00:42:16,390 --> 00:42:19,270 know, debt obligations plus friend, we do add rent, or 701 00:42:19,270 --> 00:42:24,070 mortgage, that's just not sustainable. And so observation, 702 00:42:24,070 --> 00:42:28,030 one was, we see a much older population than we anticipated, 703 00:42:28,240 --> 00:42:37,870 we see, you know, much more. We, you know, less, we actually see 704 00:42:38,170 --> 00:42:43,900 a smarter consumer than then people would like to believe. 705 00:42:44,200 --> 00:42:47,740 But I think, you know, the idea that consumers don't know what 706 00:42:47,740 --> 00:42:49,300 they're spending, where they're spending and how they're 707 00:42:49,300 --> 00:42:52,210 spending, I think that's a red herring. And we have to be very 708 00:42:52,210 --> 00:42:56,830 mindful of that. And then lastly, I think what we've seen 709 00:42:56,830 --> 00:43:00,340 is by right sizing the consumers that to what their, to their 710 00:43:00,340 --> 00:43:03,340 capacity to what they can actually afford, they perform. 711 00:43:04,240 --> 00:43:08,680 Right? And so yes, with data, we were able to sift through the 712 00:43:08,680 --> 00:43:11,770 consumers that we believe are the appropriate consumers to 713 00:43:11,770 --> 00:43:16,660 lend to based on their history, and based on their current stage 714 00:43:16,690 --> 00:43:22,210 and what they have. And that's, you know, I think, you know, and 715 00:43:22,240 --> 00:43:26,200 we go back to the regulation side of things, you cannot solve 716 00:43:26,200 --> 00:43:30,550 systemic issues without regulation that actually allows 717 00:43:30,550 --> 00:43:36,850 for innovation. There's a reason there's systemic, right, so we 718 00:43:36,850 --> 00:43:40,420 do need regulators to be at the table, we do need the creditors 719 00:43:40,420 --> 00:43:43,870 to be at the table. And we do need, you know, all the all of 720 00:43:43,870 --> 00:43:47,080 the stakeholders to be at the table to be able to create 721 00:43:47,080 --> 00:43:52,600 better solutions. And, you know, I, I left investment banking, 722 00:43:52,630 --> 00:43:55,330 particularly to figure out how do we create a workout loan 723 00:43:55,330 --> 00:43:58,210 solution for consumers who are going through financial 724 00:43:58,210 --> 00:44:02,620 distress. And we've proven that if you right size, the debt, you 725 00:44:02,620 --> 00:44:06,280 can lend to the consumers effectively. And we see credit 726 00:44:06,280 --> 00:44:09,370 score improvement of 80 points within 12 months, and over 100 727 00:44:09,370 --> 00:44:12,370 points within 18 months. So they're getting right back to 728 00:44:12,370 --> 00:44:14,620 where they were before and being able to get back into the 729 00:44:14,620 --> 00:44:19,090 system, 55% of our customers are homeowners, right? So again, 730 00:44:19,090 --> 00:44:25,630 these aren't, you know, you know, subprime or low low income 731 00:44:25,630 --> 00:44:29,440 customers, these are actual middle class Americans. 732 00:44:30,590 --> 00:44:32,510 John McNamara: Thank you. I want to switch gears just a little 733 00:44:32,510 --> 00:44:37,910 bit and go back to your journeys in innovation and ask you I'm 734 00:44:37,910 --> 00:44:40,970 sure you went in with a paradigm or a view of how our market 735 00:44:40,970 --> 00:44:44,180 operated or what the consumer need was, or what your investor 736 00:44:44,180 --> 00:44:48,800 needs were. Talk a little bit about what you learned. Along 737 00:44:48,800 --> 00:44:51,710 the journey. I assume one or more of you had at least one 738 00:44:51,710 --> 00:44:55,970 pivot or partial pivot. As you approach the market. I think the 739 00:44:55,970 --> 00:44:59,660 audience would benefit from hearing about that. With 740 00:44:59,690 --> 00:45:01,310 whomever is whoever is up. 741 00:45:01,310 --> 00:45:06,650 Ed Harycki: Sure. Yeah. So um, so we spent a lot of time 742 00:45:07,100 --> 00:45:10,850 figuring out the, I guess, the business model the technology. 743 00:45:10,850 --> 00:45:13,640 And what I didn't say is we're actually building a model that's 744 00:45:13,640 --> 00:45:18,500 free for the consumer. So put a put a plug in there. So 745 00:45:20,450 --> 00:45:24,230 however,as we thought about the model, while the consumer is 746 00:45:24,230 --> 00:45:26,990 actually sort of the customer we're trying to serve, lenders 747 00:45:26,990 --> 00:45:33,140 are a key stakeholder. And I think we probably built the 748 00:45:33,140 --> 00:45:35,960 technology faster than we thought we could. But in terms 749 00:45:35,960 --> 00:45:39,230 of having discussions with the lenders, you know, working with 750 00:45:39,230 --> 00:45:42,290 large regulated institutions that have a lot of things on 751 00:45:42,290 --> 00:45:46,340 their plate, and a lot of things to be concerned about. That's 752 00:45:46,340 --> 00:45:48,860 just a longer process. And as long as you think it is, it's 753 00:45:48,860 --> 00:45:53,900 always longer than that. And so along the way, we, you know, we 754 00:45:54,470 --> 00:45:59,000 had discussions with an FCC and nonprofit credit counseling. And 755 00:46:00,200 --> 00:46:02,720 as we had more and more discussions, you know, we felt 756 00:46:02,720 --> 00:46:06,350 that a partnership with them made a lot of sense. When we 757 00:46:06,350 --> 00:46:09,200 looked at our strategic objectives, they were very 758 00:46:09,200 --> 00:46:12,740 similar in terms of what we were trying to achieve for the, for 759 00:46:12,740 --> 00:46:16,100 the consumer, but it's just their positioning in the market, 760 00:46:16,100 --> 00:46:18,980 their long term history, their great reputations, with lenders, 761 00:46:18,980 --> 00:46:22,790 and regulators and consumers. And so as we looked at how to 762 00:46:22,790 --> 00:46:25,640 get this to the market quicker, and to serve more customers, we 763 00:46:25,640 --> 00:46:29,180 felt that they were much better positioned to help as I guess, 764 00:46:29,210 --> 00:46:33,140 coordinate, bringing this to market. And so that was a little 765 00:46:33,140 --> 00:46:36,200 bit of a pivot, where we originally thought we may market 766 00:46:36,200 --> 00:46:39,560 directly to consumers, which we could do, but we'd rather spend 767 00:46:39,560 --> 00:46:42,950 our time developing the technology and working with 768 00:46:42,950 --> 00:46:46,610 other organizations to get it to consumers in a more, I guess, 769 00:46:46,610 --> 00:46:47,480 efficient manner. 770 00:46:47,960 --> 00:46:50,060 Great. Thanks. Itzik? 771 00:46:50,060 --> 00:46:54,230 Itzik Cohen: Yeah, I mean, I was not necessarily pivots. But I 772 00:46:54,230 --> 00:46:59,060 was very surprised as I entered that settlement, I knew the 773 00:46:59,060 --> 00:47:02,750 process and what it takes, I knew a lot of the research I've 774 00:47:02,750 --> 00:47:08,030 done, but I was shocked by how poor the customer experience is. 775 00:47:08,120 --> 00:47:11,300 And it's somebody who was came from technology, I mean, 25 776 00:47:11,330 --> 00:47:14,930 years in tech, you know, you pride yourself on the product 777 00:47:14,930 --> 00:47:18,440 you provide, and you want to make it the best experience 778 00:47:18,440 --> 00:47:21,590 possible. And it just not a very good experience for consumers. 779 00:47:22,100 --> 00:47:24,470 And that's what led me to kind of start thinking, How do I 780 00:47:24,470 --> 00:47:29,000 remove that friction to the consumer, and what's causing all 781 00:47:29,000 --> 00:47:32,660 this nightmare? You know, our experience? And, you know, look, 782 00:47:32,660 --> 00:47:35,570 I mean, even debt settlement companies who are doing really 783 00:47:35,570 --> 00:47:40,490 well, the leading ones, have a 60% retention, meaning 60% of 784 00:47:40,490 --> 00:47:44,000 their customers actually graduate successfully? That's 785 00:47:44,000 --> 00:47:47,540 not very good. I mean, any business that I've been, if not 786 00:47:47,540 --> 00:47:51,110 these were not my numbers, that would not be something that the 787 00:47:51,110 --> 00:47:54,110 product person will be proud of. I mean, so how do we get those 788 00:47:54,110 --> 00:47:56,630 numbers higher for when you start thinking about what 789 00:47:56,630 --> 00:48:01,190 consumers are going through once they enroll? It's not pretty, I 790 00:48:01,190 --> 00:48:05,300 mean, they're getting calls and harassed by creditors. This lack 791 00:48:05,300 --> 00:48:09,530 of communication between debt settlement and the creditors. By 792 00:48:09,530 --> 00:48:14,600 design, by the way, is something that enhances that type of 793 00:48:15,590 --> 00:48:19,490 collection calls and confusion and lack of understanding from 794 00:48:19,490 --> 00:48:22,820 the creditor what's going on. The lack of sharing data between 795 00:48:22,820 --> 00:48:25,760 the parties involved, I mean, bureaus don't know that you're 796 00:48:25,760 --> 00:48:29,000 in debt settlement, somebody can sign into debt settlement today. 797 00:48:29,540 --> 00:48:32,180 And tomorrow, get another loan, and nobody would know about it, 798 00:48:32,180 --> 00:48:36,290 because you're under the radar. This whole system is really 799 00:48:36,290 --> 00:48:40,280 broken because of this lack of trust. And this lack this lack 800 00:48:40,280 --> 00:48:44,630 of trust creates friction that I think is unsustainable when it 801 00:48:44,630 --> 00:48:50,570 comes to the overall outcomes for consumers as just not good 802 00:48:50,570 --> 00:48:53,750 enough, and they're too expensive. So these are the 803 00:48:53,750 --> 00:48:57,620 things that kind of this is the mindset I went into this 804 00:48:57,650 --> 00:49:03,650 business with. I admitted, my investors didn't want to come 805 00:49:03,650 --> 00:49:08,930 support my, my grandiose vision. But regardless, I think that 806 00:49:10,400 --> 00:49:12,410 it's the right thing to do. So. 807 00:49:12,530 --> 00:49:13,790 John McNamara: Great. Thank you. Alex? 808 00:49:14,220 --> 00:49:16,830 Alex Mooradian: So a little different than than Ed's 809 00:49:16,860 --> 00:49:20,280 approach to the market. We are a direct to consumer platform. So 810 00:49:21,270 --> 00:49:25,950 we were trying to build a magical experience for a 811 00:49:25,950 --> 00:49:32,280 consumer who's who's in distress. And certainly not a 812 00:49:32,280 --> 00:49:34,890 pivot, but it is something we struggle with every single day 813 00:49:34,920 --> 00:49:40,110 around how do you create an a simple, clear online process 814 00:49:40,110 --> 00:49:43,290 that allows the consumer to move through those steps and have a 815 00:49:43,290 --> 00:49:46,320 moment of delight or in our case, it's really moment of just 816 00:49:47,100 --> 00:49:50,130 like an exhale like my problems have been started to be 817 00:49:50,130 --> 00:49:58,020 addressed. And I would say our biggest challenge is the the 818 00:49:58,020 --> 00:50:02,160 internal conflict between my product designers to simplify 819 00:50:02,160 --> 00:50:07,560 and remove information from the site with fighting with my debt 820 00:50:07,560 --> 00:50:10,380 experts who are saying, well, no, the consumer needs to 821 00:50:10,380 --> 00:50:12,690 understand that and the consumer needs to see this risk. And they 822 00:50:12,690 --> 00:50:15,780 need to check this box, and they need to watch this video. And so 823 00:50:16,290 --> 00:50:20,820 we have this constant push and pull of an educated and 824 00:50:20,820 --> 00:50:24,240 empowered consumer who really understands what they're doing, 825 00:50:24,270 --> 00:50:28,650 regardless of whatever the path is. That really, in many cases 826 00:50:28,650 --> 00:50:33,000 is not delightful. And we, we run a ton of AV tests where 827 00:50:33,000 --> 00:50:35,820 we're saying, can we pull that piece of information off the 828 00:50:35,820 --> 00:50:38,550 page? Do they really need to know that right now? Or can they 829 00:50:38,580 --> 00:50:43,620 can we tell them that later. And then, in the end, we spend 830 00:50:43,620 --> 00:50:46,260 marketing dollars to drive consumers to the platform to try 831 00:50:46,260 --> 00:50:49,140 to help them and so we're, we're constantly in that push and pull 832 00:50:49,140 --> 00:50:52,980 between getting them to convert getting them to understand and 833 00:50:52,980 --> 00:50:56,640 in some cases, just saying, like, we we know better than 834 00:50:56,640 --> 00:50:59,850 they know, the situation themselves. And so we're going 835 00:50:59,850 --> 00:51:02,130 to, we're going to even push them in that direction, because 836 00:51:02,130 --> 00:51:04,680 we think that is the right direction for them. There's a 837 00:51:04,680 --> 00:51:08,640 lot of behavioral psychology goes into it, it comes down to 838 00:51:08,670 --> 00:51:12,750 how do you present information on a page, in what order font 839 00:51:12,750 --> 00:51:16,620 sizes, colors, all those different things, and it's, it's 840 00:51:16,620 --> 00:51:19,530 really hard, and it's stressful, because we're, like, we're truly 841 00:51:19,530 --> 00:51:24,210 impacting people's lives. And it makes when the designer and the 842 00:51:24,210 --> 00:51:26,370 debt expert don't agree, like, sometimes you gotta, I gotta 843 00:51:26,370 --> 00:51:29,370 come in and be like, I'm gonna break the tie in this particular 844 00:51:29,370 --> 00:51:29,880 scenario. 845 00:51:30,300 --> 00:51:33,000 John McNamara: Thank you, Jerry, you've been at this for a while. 846 00:51:35,070 --> 00:51:40,110 Jerry Nemorin: Yeah, I don't have hair anymore. You know, I, 847 00:51:40,770 --> 00:51:46,290 I came into this space with, with the idea that there had to 848 00:51:46,290 --> 00:51:51,600 be a better solution for consumers. And well, and it 849 00:51:51,600 --> 00:51:56,640 needs to start with creditors. And so we built this product, 850 00:51:56,730 --> 00:52:02,220 particularly with the, with the belief that we could get 851 00:52:02,250 --> 00:52:06,240 creditors to engage and create a solution that would make sense 852 00:52:06,240 --> 00:52:13,260 for the consumer. And, you know, that did not happen. And so for 853 00:52:13,260 --> 00:52:16,590 us, you know, at the end of the day, what we're trying to do is 854 00:52:16,590 --> 00:52:23,760 help consumers. And so we, our pivot, was to go and work with 855 00:52:23,760 --> 00:52:27,780 the debt settlement companies. Because I do believe that 856 00:52:27,780 --> 00:52:31,650 settlement as a product needs to exist, I do think it's a better 857 00:52:31,650 --> 00:52:37,410 solution for consumers than bankruptcy, I'm sorry. You know, 858 00:52:37,470 --> 00:52:42,600 and I do think, you know, we have to create market base 859 00:52:42,630 --> 00:52:48,180 solutions that actually help consumers, you know, when they 860 00:52:48,180 --> 00:52:51,990 are in a time of distress. And so, for me that the number one, 861 00:52:52,710 --> 00:52:59,190 the number one, you know, the number one concern is the 862 00:52:59,370 --> 00:53:03,900 financial health of the consumer. And so, our pivot was 863 00:53:03,900 --> 00:53:07,290 alright, if these consumers are going through this process, and 864 00:53:07,290 --> 00:53:12,750 it is not the most delightful, or the most succinct, or the 865 00:53:12,750 --> 00:53:19,560 most beneficial product out there, how can we engage to find 866 00:53:19,560 --> 00:53:22,170 a way to help them and get them out of this as quickly as 867 00:53:22,170 --> 00:53:26,130 possible. And that's, that was the solution that, you know, 868 00:53:26,130 --> 00:53:28,590 that was our pivot was, let's work with that someone companies 869 00:53:28,590 --> 00:53:31,770 that have clients who have already demonstrated that they 870 00:53:31,770 --> 00:53:36,360 can make these payments. And within it's a bridge, because 871 00:53:36,390 --> 00:53:38,610 you know, they've proven the capacity and based on their 872 00:53:38,610 --> 00:53:42,450 capacity, what they can afford to pay, and will step in and 873 00:53:42,450 --> 00:53:45,780 will accelerate the settlement for them and give them a path to 874 00:53:45,780 --> 00:53:49,860 rebuild their credit. And, you know, they can refinance us out, 875 00:53:49,920 --> 00:53:53,400 and we don't charge and we charge, you know, 14, nine, five 876 00:53:53,400 --> 00:53:56,970 to 18, 9, to 5% interest rate. So we're not charging the 26 to 877 00:53:56,970 --> 00:54:00,960 30%, that whatever their credit score said they should be 878 00:54:00,960 --> 00:54:03,900 charged because our belief is that these are recovering prime 879 00:54:03,900 --> 00:54:07,680 consumers, and we're going to price them at at a prime rate. 880 00:54:08,970 --> 00:54:13,530 And so that's that's really, you know, I guess, a big big pivot, 881 00:54:13,530 --> 00:54:18,630 but at the end of the day, it's all about what what benefits the 882 00:54:18,630 --> 00:54:19,200 consumer. 883 00:54:20,100 --> 00:54:22,350 John McNamara: Thank you. Interestingly, we have six 884 00:54:22,350 --> 00:54:28,350 minutes left. So I will innovators choice, I've got two 885 00:54:28,350 --> 00:54:31,230 questions pick which you can choose whichever one you'd like 886 00:54:31,230 --> 00:54:34,740 to. First question is, what's what do you think's the most 887 00:54:34,740 --> 00:54:38,130 interesting thing happening in this space right now? And the 888 00:54:38,130 --> 00:54:40,530 second one, a number of you talked on this about this 889 00:54:40,530 --> 00:54:43,410 earlier, but what's the what are the biggest challenges to broad 890 00:54:43,410 --> 00:54:47,310 adoption of a more consumer friendly, of course, more 891 00:54:47,310 --> 00:54:49,110 consumer friendly debt relief options? 892 00:54:50,700 --> 00:54:52,920 Itzik Cohen: I'll start, I'll start it. I didn't see your 893 00:54:52,920 --> 00:54:59,040 second question. And I think that the just a lot of economics 894 00:54:59,040 --> 00:55:02,400 in current products, It's hard to compete with the marketing. 895 00:55:04,140 --> 00:55:08,070 So I think that that's the biggest challenge is awareness 896 00:55:08,100 --> 00:55:10,890 of the existence of his products. And that's true for 897 00:55:10,890 --> 00:55:14,310 nonprofit credit counseling and for the new innovators in space, 898 00:55:14,310 --> 00:55:17,850 because if you're going direct to consumer acquiring customers 899 00:55:17,850 --> 00:55:19,050 is expensive in space. 900 00:55:20,610 --> 00:55:24,300 Ed Harycki: So I guess I'd say because our model is a 901 00:55:24,330 --> 00:55:27,150 partnership driven model, that it's going to be really 902 00:55:27,180 --> 00:55:30,870 essential for us to get adoption, that we can create 903 00:55:30,870 --> 00:55:36,570 some standards across lenders in terms of debt resolution 904 00:55:36,570 --> 00:55:39,840 outcomes, we need to sort of create a democratic process with 905 00:55:39,840 --> 00:55:43,680 lenders on the same page, so that, you know, if a customer 906 00:55:43,680 --> 00:55:48,210 needs a 20% debt reduction, that there's a process where all the 907 00:55:48,210 --> 00:55:51,690 lenders are on a platform, say, yep, information is verified, it 908 00:55:51,690 --> 00:55:54,720 makes a lot of sense. Because without those standards is going 909 00:55:54,720 --> 00:55:57,360 to be very difficult to automate a lot. So we won't be able to 910 00:55:57,360 --> 00:56:00,240 sort of scale it as much. But I think if we can create those, 911 00:56:00,600 --> 00:56:03,630 then we can dramatically simplify the process and speed 912 00:56:03,630 --> 00:56:07,020 it up and make this kind of technology available to a lot of 913 00:56:07,020 --> 00:56:07,590 parties. 914 00:56:09,970 --> 00:56:12,700 Alex Mooradian: So I'll answer the first, I think there's three 915 00:56:12,700 --> 00:56:15,070 exciting things happening right now in the debt relief space. 916 00:56:15,070 --> 00:56:19,060 And the first is this day. I know this day has been a long 917 00:56:19,060 --> 00:56:22,090 time coming and to have this conversation in an open forum is 918 00:56:22,120 --> 00:56:26,980 is absolutely the right step. I think the second thing that's 919 00:56:26,980 --> 00:56:30,610 happening is the settlement industry is really becoming a 920 00:56:30,610 --> 00:56:33,220 victim of their own success, and that it is becoming such a 921 00:56:33,220 --> 00:56:37,150 problem for creditors that conversations that have not been 922 00:56:37,180 --> 00:56:41,230 happening in the past are now happening where it's been a 923 00:56:41,230 --> 00:56:44,650 problem, but now it is a real problem for many creditors. And 924 00:56:44,650 --> 00:56:47,320 then the third is I think there's some really interesting 925 00:56:47,320 --> 00:56:49,630 things happening within the credit counseling space with 926 00:56:49,630 --> 00:56:54,940 their DRP program, and the EMS program where there is finally 927 00:56:54,940 --> 00:56:56,260 some creativity happening. 928 00:56:56,260 --> 00:56:58,090 John McNamara: Alex, for the benefit of the audience, can you 929 00:56:58,090 --> 00:57:01,330 go back and just describe what a DRP and an EMS are? 930 00:57:01,480 --> 00:57:04,060 Alex Mooradian: So the those are different programs that are 931 00:57:04,060 --> 00:57:08,830 being created within the credit counseling space with, with 932 00:57:08,830 --> 00:57:12,040 Cambridge credit counseling, the NFCC. Like, there's a bunch of 933 00:57:12,040 --> 00:57:15,760 folks that are in the room today that are less than full, 934 00:57:15,760 --> 00:57:20,860 balanced programs, depending on a consumers situation. So I 935 00:57:20,860 --> 00:57:23,200 think Rebecca is going to sit on a panel later can probably 936 00:57:23,200 --> 00:57:25,870 highlight some more of the specifics, but they are, they're 937 00:57:25,870 --> 00:57:29,860 really the first step into some version of a structured less 938 00:57:29,860 --> 00:57:33,310 than full balance program, outside of the traditional debt 939 00:57:33,310 --> 00:57:34,030 settlement world. 940 00:57:34,300 --> 00:57:37,900 Right. Thank you. Jerry, you're gonna close this out. 941 00:57:39,220 --> 00:57:44,560 Jerry Nemorin: Pressure pressure, I'll take one. I think 942 00:57:44,560 --> 00:57:48,640 there's, you know, it's exciting to see people like Ed and Alex 943 00:57:48,670 --> 00:57:53,680 come in to space and in creating innovative solutions to focus on 944 00:57:53,680 --> 00:57:58,510 the consumer. I think this is a space that has sorely lacked 945 00:57:58,570 --> 00:58:05,260 innovation and definitely as necessary. I think we're about 946 00:58:05,260 --> 00:58:07,510 to get into recession. And so that's going to be an 947 00:58:07,510 --> 00:58:12,370 interesting conversation to be had amongst creditors. And you 948 00:58:12,370 --> 00:58:18,880 know, how that accelerate or maybe delay some of the adoption 949 00:58:18,880 --> 00:58:22,060 of these these products. I'd like to believe it should 950 00:58:22,060 --> 00:58:30,310 accelerate it, but we shall see. And I do think there seems to be 951 00:58:30,310 --> 00:58:36,310 a bit more openness from creditors and regulators alike, 952 00:58:36,730 --> 00:58:43,000 to start in rethink to rethink that relief broadly. And what 953 00:58:43,000 --> 00:58:45,880 that means, what that looks like, and, and how we should 954 00:58:45,880 --> 00:58:55,120 deploy it. And lastly, I think we are starting to see a lot 955 00:58:55,120 --> 00:59:02,410 more even of the existing debt settlement companies trying to 956 00:59:02,410 --> 00:59:07,060 think of ways to improve the consumer experience. Now I'm not 957 00:59:07,060 --> 00:59:12,430 saying they're going to improve the fee. Right. But you're 958 00:59:12,430 --> 00:59:16,540 starting to see a bit more of those guys thinking about how do 959 00:59:16,540 --> 00:59:20,530 we change the landscape for the consumer, the experience itself, 960 00:59:20,560 --> 00:59:26,620 not. Economics wise, I think is another conversation. But I'm 961 00:59:26,620 --> 00:59:30,430 hopeful. I'm hopeful that you know, with the innovation that's 962 00:59:30,430 --> 00:59:33,310 happening in this space that will be able to create better 963 00:59:33,310 --> 00:59:38,410 solutions, you know, automatic solutions for consumers and get 964 00:59:38,410 --> 00:59:39,970 them back to financial health. 965 00:59:40,420 --> 00:59:43,840 John McNamara: Right. Thank you. Listen, Itzik, and Alex, Jerry, 966 00:59:43,840 --> 00:59:46,840 thank you so much for giving generously your time and I'd 967 00:59:46,840 --> 00:59:49,600 also like to thank all of our panelists for giving so 968 00:59:49,600 --> 00:59:50,830 generously of their time today. 969 00:59:58,300 --> 01:00:01,870 Unknown: Thanks again, John and panel, this thank you. We are 970 01:00:01,870 --> 01:00:07,570 scheduled for a 15 minute break please be back to your seats 971 01:00:07,600 --> 01:00:10,090 seats by 1230. Thank you.