1 00:00:00.400 --> 00:00:04.200 Moving on from sbfa to cfbp see 2 00:00:03.200 --> 00:00:07.200 it cfpb TV and pressing 3 00:00:06.200 --> 00:00:09.700 that all day. Um, it recently 4 00:00:09.700 --> 00:00:12.600 released about give or take 800 pages 5 00:00:12.600 --> 00:00:15.200 of fine print the final rules of how 6 00:00:15.200 --> 00:00:18.300 it will govern a small business finance companies to 7 00:00:18.300 --> 00:00:21.800 collect data and report that back to the federal 8 00:00:21.800 --> 00:00:24.500 government. So Sean, why 9 00:00:24.500 --> 00:00:27.400 don't we take going you take that away and let's dissolve that 10 00:00:27.400 --> 00:00:30.600 unpack them. It's dissolve it. Maybe some 11 00:00:30.600 --> 00:00:35.200 people wanted to want to dissolve it. So it's 888 Pages. 12 00:00:34.200 --> 00:00:37.300 That's not an exaggeration. I I 13 00:00:37.300 --> 00:00:40.400 counted the pages. It wasn't just like footnotes unless page. 14 00:00:40.400 --> 00:00:43.700 I I didn't read it. You didn't 15 00:00:43.700 --> 00:00:43.900 read it. 16 00:00:45.400 --> 00:00:49.100 All right. So what is the Consumer Financial Protection Bureau? 17 00:00:48.100 --> 00:00:51.300 That's everyone's first question the who 18 00:00:51.300 --> 00:00:54.800 now, I never even heard of this agency who would 19 00:00:54.800 --> 00:00:57.500 who we're talking about, you know, the acronyms even 20 00:00:57.500 --> 00:01:01.200 difficult to remember. So this particular agency 21 00:01:00.200 --> 00:01:04.000 was born out of the financial crisis with essentially 22 00:01:03.400 --> 00:01:06.400 invented in 2010 from the 23 00:01:06.400 --> 00:01:09.800 Dodd-Frank Act. So we all remember what happened. Oh 24 00:01:09.800 --> 00:01:12.300 809. Yep Congress got mad 25 00:01:12.300 --> 00:01:15.400 said, we need to stop all bad things from happening in the future. 26 00:01:15.400 --> 00:01:18.400 They passed the Wall Street reform and consumer protection 27 00:01:18.400 --> 00:01:21.900 act AKA Dodd Frank and the cfpb was 28 00:01:21.900 --> 00:01:25.100 one of the agencies that they invented in this 29 00:01:24.100 --> 00:01:27.200 law. The cfpb is 30 00:01:27.200 --> 00:01:30.900 supposed to cover Consumer Finance. So, 31 00:01:30.900 --> 00:01:33.600 how are we talking about it in business Landing? 32 00:01:33.600 --> 00:01:37.300 How is it coming up? Well, there's a special clause in 33 00:01:36.300 --> 00:01:39.500 the statute says they're in 34 00:01:39.500 --> 00:01:43.300 charge of collecting data on small business finance. It's 35 00:01:42.300 --> 00:01:44.900 called section 1071 36 00:01:45.400 --> 00:01:49.000 I've been talking about it for almost 10 years. Probably actually 37 00:01:48.300 --> 00:01:49.700 probably longer. 38 00:01:50.600 --> 00:01:54.100 Probably longer than 10 years section 1071. It's 39 00:01:53.100 --> 00:01:56.500 a big thing all of a sudden. It's becoming reality. 40 00:01:56.500 --> 00:01:59.300 The cfpb's job was to figure 41 00:01:59.300 --> 00:02:02.200 out how do they collect data from small 42 00:02:02.200 --> 00:02:05.100 business finance companies. How do they evaluate it? 43 00:02:05.100 --> 00:02:05.800 And then 44 00:02:06.800 --> 00:02:09.300 What do they do with it? So what's what's 45 00:02:09.300 --> 00:02:12.000 interesting is that the statute doesn't tell them what to do 46 00:02:12.300 --> 00:02:15.200 with the data. It tells them to collect data from 47 00:02:15.200 --> 00:02:18.300 these companies and try to determine if there's any 48 00:02:18.300 --> 00:02:21.300 unfairness taking place are there 49 00:02:21.300 --> 00:02:24.400 disparities demographics and stuff like that, you know 50 00:02:24.400 --> 00:02:27.200 gender ethnicity, right? That's the 51 00:02:27.200 --> 00:02:30.600 whole idea is to study other disparities in how 52 00:02:30.600 --> 00:02:33.000 lending is taking place in the small business finance World. 53 00:02:33.500 --> 00:02:36.400 It doesn't say what they can do with it if they find anything. 54 00:02:37.600 --> 00:02:41.100 Maybe there's a presumption that they can come and Sue 55 00:02:40.100 --> 00:02:43.400 or penalize companies that 56 00:02:43.400 --> 00:02:46.300 they find things. We don't even know. That's an area. I don't even I don't 57 00:02:46.300 --> 00:02:46.900 even want to go. 58 00:02:47.800 --> 00:02:50.500 But what we do know is that they are required 59 00:02:50.500 --> 00:02:53.900 to collect data from small business finance companies. And 60 00:02:53.900 --> 00:02:56.100 these companies have to collect the 61 00:02:56.100 --> 00:03:00.100 data in a very precise way. The underwriter 62 00:02:59.100 --> 00:03:02.200 is not allowed to know everything about the applicant. 63 00:03:04.300 --> 00:03:07.200 There are things they need to know about the applicant. Yeah, 64 00:03:07.200 --> 00:03:10.200 that maybe they're not allowed to look at you because then 65 00:03:10.200 --> 00:03:13.300 they could have subconscious bias, right or they might 66 00:03:13.300 --> 00:03:16.500 not be allowed to know your name because that could create subconscious bias. 67 00:03:16.500 --> 00:03:20.100 Right? So people like whoa, this is kind of complicated. Yeah, 68 00:03:19.100 --> 00:03:20.800 because right now 69 00:03:21.700 --> 00:03:24.700 Let's say a little bit of an old-fashioned company. We're all 70 00:03:24.700 --> 00:03:28.000 about meeting the prospect in person. We go out, you know 71 00:03:28.800 --> 00:03:31.100 play a few rounds of golf but come back and we approve or 72 00:03:31.100 --> 00:03:34.100 decline their loan. Now, the cfpb is saying you're not allowed 73 00:03:34.100 --> 00:03:35.800 to do that. You're not allowed to see the person. 74 00:03:36.800 --> 00:03:39.400 So people are like, okay this sounds like there's gonna be a lot of changes 75 00:03:39.400 --> 00:03:42.500 here and there are so part of the collection requirements 76 00:03:42.500 --> 00:03:45.200 are here's how you're allowed to collect the data. 77 00:03:45.200 --> 00:03:48.400 Here's how you store the data and here's how you report the data 78 00:03:48.400 --> 00:03:49.000 to us. 79 00:03:50.300 --> 00:03:53.400 It takes a lot of pages to explain how that process works. 80 00:03:53.400 --> 00:03:56.400 888 Pages. It's a 81 00:03:56.400 --> 00:03:57.800 lot 888 pages. 82 00:03:59.400 --> 00:03:59.700 So 83 00:04:00.500 --> 00:04:03.300 I admit I have not read any of it. I have been 84 00:04:03.300 --> 00:04:06.200 following the law for quite some time. So I know that the nuts and 85 00:04:06.200 --> 00:04:09.200 bolts of like why this is something that 86 00:04:09.200 --> 00:04:12.200 people are talking about because it may impact the way that 87 00:04:12.200 --> 00:04:15.600 you take an application in how you underwrite the 88 00:04:15.600 --> 00:04:15.800 application. 89 00:04:16.800 --> 00:04:19.500 And then how you report the data? Yeah, because 90 00:04:19.500 --> 00:04:22.700 right now it's you know in business finance. We already 91 00:04:22.700 --> 00:04:25.300 have Customs or the industry has 92 00:04:25.300 --> 00:04:28.300 custom. That's how they do things and this may reshape. 93 00:04:28.900 --> 00:04:31.600 Some of them. Yeah, so it yeah, 94 00:04:31.600 --> 00:04:34.200 if you haven't read it, I don't expect you to 95 00:04:34.200 --> 00:04:38.000 law is not really scheduled to go into effect until 96 00:04:37.500 --> 00:04:40.500 next year. Okay, so there is 97 00:04:40.500 --> 00:04:43.200 a little bit more time for this one. I know that a lot of people like 98 00:04:43.200 --> 00:04:44.200 to wait till the last minute. 99 00:04:44.900 --> 00:04:47.000 You know to finally get the reduction in a row. 100 00:04:47.900 --> 00:04:50.600 You do have time to to comply with 101 00:04:50.600 --> 00:04:54.100 this one, but it is the doozy 888 102 00:04:53.100 --> 00:04:56.700 pages. I mean, I like to read complex things. 103 00:04:57.800 --> 00:04:59.500 I just didn't I just like 104 00:05:00.800 --> 00:05:03.600 there's no shot. There's no shot. There's 105 00:05:03.600 --> 00:05:04.500 audiobooks. 106 00:05:05.600 --> 00:05:10.500 Audiobooks and audiobook of oh, okay 88 107 00:05:08.500 --> 00:05:11.600 page of Regulation and 108 00:05:11.600 --> 00:05:12.100 audiobook. 109 00:05:13.500 --> 00:05:16.600 Called but it is an interesting article. I mean, 110 00:05:16.600 --> 00:05:19.200 it is an interesting number of pages if you into 111 00:05:19.200 --> 00:05:22.300 that type of stuff and we have information regarding this 112 00:05:22.300 --> 00:05:26.800 story on our website on debank.com. But again, 113 00:05:26.800 --> 00:05:29.500 like Sean said it's 880 pages 114 00:05:29.500 --> 00:05:32.400 and there's there's some strange nuances to it. 115 00:05:32.400 --> 00:05:34.200 Like what I was just saying before like 116 00:05:35.400 --> 00:05:38.100 Certain things you're you are or not allowed to 117 00:05:38.100 --> 00:05:40.800 know about applicant and if you don't know. 118 00:05:41.900 --> 00:05:44.400 There's you know, there's actually Parts where if the 119 00:05:44.400 --> 00:05:47.100 applicant declines to share things with you. You're like, 120 00:05:47.100 --> 00:05:50.300 this is a little weird. Why do you need this and you're like because the 121 00:05:50.300 --> 00:05:51.300 government requires it? 122 00:05:51.900 --> 00:05:55.000 You're actually supposed to guess certain 123 00:05:54.900 --> 00:05:57.300 demographic things about them. That 124 00:05:57.300 --> 00:06:00.600 might perhaps make some people uncomfortable. Yeah, 125 00:06:00.600 --> 00:06:03.100 so this is going to reshape how 126 00:06:03.100 --> 00:06:06.700 the business is done from an underwriting perspective. That's Monumental 127 00:06:06.700 --> 00:06:09.200 in that it's Monumental in that way definitely is, 128 00:06:09.200 --> 00:06:12.600 you know, I I only read kind of the the earliest 129 00:06:12.600 --> 00:06:15.200 stages of what kind of things were required and I 130 00:06:15.200 --> 00:06:17.500 I was surprised and I know others were too 131 00:06:18.300 --> 00:06:21.200 but in 2024 when this goes 132 00:06:21.200 --> 00:06:24.600 into into effect, I think we will see that the 133 00:06:24.600 --> 00:06:27.500 underwriting process for every company whether or not you're you're 134 00:06:27.500 --> 00:06:30.100 excited to comply with it or not. I know 135 00:06:30.100 --> 00:06:33.200 that there is some who are very excited about regulation, etc. Etc. 136 00:06:33.200 --> 00:06:36.200 I think it will change things a bit but we do 137 00:06:36.200 --> 00:06:39.200 have time to comply with this one. Yeah. No, we serve this 138 00:06:39.200 --> 00:06:43.100 2024 we have some time and I think you know, 139 00:06:43.100 --> 00:06:46.300 it's a interesting piece of information if you 140 00:06:46.300 --> 00:06:49.400 want to read it and you can find it online. Good luck 141 00:06:49.400 --> 00:06:52.000 to you. Yeah. Well wish you the best to look for that, you know, 142 00:06:52.300 --> 00:06:55.100 no way I say to send it to your lawyer or have them read it to you or whatever or give 143 00:06:55.100 --> 00:06:58.100 you the cliff notes by 880 Pages sounds like it might 144 00:06:58.100 --> 00:07:01.300 be but yeah, I'm sure I'm sure people 145 00:07:01.300 --> 00:07:04.500 will I'm sure organizations will make kind of like the clip 146 00:07:04.500 --> 00:07:07.400 notes guides fine print Mass produce Guides of what 147 00:07:07.400 --> 00:07:10.200 they should really be worried about. It's even double space. 148 00:07:10.200 --> 00:07:14.500 Yeah, is it I don't think it's single 149 00:07:13.500 --> 00:07:17.400 space 88 Pages. Oh, yeah.