Articles by deBanked Staff
WBL Experiences Unplanned Growth, Suspends Further Fundings
December 9, 2022
World Business Lenders is suspending funding, according to a representative of the company.
Earlier today, WBL CEO Doug Naidus circulated a memo with an update on the company’s status:
“Our Company has experienced unplanned growth this year given market conditions. As a result, we have fully deployed our existing credit availability and must therefore suspend any further fundings and related operations until additional lending capacity is installed. During this interruption in our business and while we continue discussions with alternative capital sources, the company will take the opportunity to pivot to a new business model.”
Weigh In: Should The New York Commercial Financing Disclosure Law Be Preempted by TILA?
December 7, 2022
The CFPB issued a statement on Wednesday to announce that it does not believe that New York’s commercial financing disclosure law is preempted by the Truth in Lending Act (TILA).
In a simple sense, the question of whether or not commercial finance companies can potentially disregard portions of New York’s commercial finance disclosure law on the basis that a similar federal law (TILA) has the superior claim to the legalities surrounding APR disclosures, has been answered by the CFPB. It says no. The agency believes that the two laws do not conflict with each other on the stated basis that TILA regulates “consumer purpose transactions” hence New York’s law is not preempted by TILA. At this time this is merely the CFPB’s “preliminary determination.” Now it is asking for the public’s thoughts on the matter.
“The CFPB is requesting comment on whether it should finalize its preliminary determination that the New York law – as well as potentially similar laws in California, Utah, and Virginia – are not preempted.”
The formal Request for Comment and instructions to submit comment can be found here.
The timing is a bit curious given that this issue has just been legally raised in another state. The deadline to submit comment to the CFPB is January 20, 2023.
Missouri Reintroduces its Commercial Financing Disclosure Bill
December 7, 2022
In a preview of what’s to come in 2023, Missouri State Senator Justin Brown (R) has reintroduced a commercial financing disclosure bill. SB 187, which is significantly less stringent than the law about to go into effect in California, nonetheless would require brokers to be licensed in the state.
“The act requires registration with the Division of Finance prior to engaging in business as a commercial financial broker,” the bill states. “Specifically, the act requires filing a registration form, submitting a fee of $100, and obtaining a surety bond in the amount of $10,000. A registration renewal is required every year…”
This bill was introduced last year but failed to advance. Other states that are expected to reintroduce similar bills this year include Connecticut and Maryland.
Co-founders of $2B Recurring Revenue Funding Platform Step Down
November 27, 2022
It’s not a loan, it’s a trade. That’s the mantra of Pipe, an alternative finance platform that allows businesses to trade their future recurring revenues in exchange for upfront capital today. It sounds similar to a merchant cash advance but the company has rejected such comparisons in the past. It instead branded itself as the “Nasdaq for revenue” and grew itself into getting a $2 billion valuation just last year.
Last week, however, all three co-founders announced they were stepping down from their roles. In an exclusive with Techcrunch, Pipe co-CEO Harry Hurst said that they realized they needed an executive team that could really take the company to the next level, explaining that “we’re 0-1 builders, not at-scale operators.”
The following day, a story in Forbes suggested that there was more to the announcement, drawing attention to the possibility that Pipe had facilitated deals with bitcoin mining companies and that a source had said that some of them had gone bad. A since deleted tweet by a VC had said that there had been a significant loss on at least one of them.
The timing of Hurst’s resignation, announced before a new CEO could even be hired, allowed rumors to swirl. On Sunday night, Hurst finally addressed them.
4/ We haven’t “loaned $80M to a bitcoin mining company” and “lost it all”. We do have some customers in the space, but none of them have gone to zero.
— Harry Hurst (@harryhurst) November 28, 2022
6/ On the $70M personal loan rumor (perhaps the most bizarre): I haven't taken a loan from Pipe or any other loan against my holdings in Pipe.
— Harry Hurst (@harryhurst) November 28, 2022
11/ Now that’s all been addressed – back to building.
— Harry Hurst (@harryhurst) November 28, 2022
A tweet by a VC that had originally fueled some of the unflattering rumors has since been deleted.
Last Chance Black Friday Special – Early Bird Tickets to deBanked CONNECT MIAMI
November 25, 2022deBanked CONNECT MIAMI has extended its early bird ticket pricing for just 1 more day in honor of Black Friday. Today is your last opportunity to take advantage of a lower price!!!
deBanked CONNECT MIAMI is being held at the Miami Beach Convention Center on January 19th!
Our office will reopen on Monday, November 28th.
IOU Originated Whopping $74.2M in Q3
November 21, 2022
IOU Financial experienced a strong third quarter, reporting total loan originations of $74.2M, a 25.8% increase over Q2. The year-to-date total now stands at $192.7M.
“IOU Financial continues to grow revenues and invest in scalability while reducing its adjusted operating expense ratio,” said Robert Gloer, President and CEO, in an official announcement. “We remain laser focused on scalability and growth while maintaining consistent underwriting standards, and we expect to build on this trend in the months and quarters to come.”
IOU attributes the growth to “healthy demand from borrowers” and “continued demand from investors seeking high quality loans.”
Notably, the company said that collections had been in line with expectations and it had “not seen significant increases in delinquencies, defaults or loan modifications.”
The Canadian Lenders Summit is Back
November 15, 2022
deBanked will be attending the Canadian Lenders Summit on Wednesday in Toronto. It is the first major in-person event produced by the Canadian Lenders Association (CLA) since covid. The last event in 2019, also attended by deBanked, was a hit.
More than 500 people are registered for this one.
The chairman of the CLA is Neil Wechsler, CEO of OnDeck Canada.
Garcia Expected to Agree To Consent to SEC Judgment in MJ Capital Case
November 15, 2022Former MJ Capital Funding CEO Johanna Garcia is expected to consent to judgment with the SEC without admitting or denying the claims, according to documents filed in the SEC case. As part of that she will have to disgorge ill-gotten gains, pay prejudgment interest thereon, and incur a civil penalty. The total amount is to be determined.
At last tally, the Receiver said it had received more than 10,000 claims and is busy verifying all of them. MJ Capital raised nearly $200M from investors.
