Articles by deBanked Staff
Interest Rate Cuts Unlikely For a Couple of Years
June 14, 2023
Just because the Fed decided to maintain interest rates where they are doesn’t mean that a turning point for future decreases is on the horizon. On the contrary, Fed Chair Jerome Powell said cuts are unlikely for a couple of years, citing persistent inflation.
Excerpted as:
“[rate cuts] will be appropriate at such time as inflation is coming down really significantly, and again we’re talking about a couple years out, I think as anyone can see not a single person on the committee wrote down a rate cut this year, nor do I think it is likely to be appropriate…”
Watch the full statement
Jerome Powell says the Fed is "talking about a couple of years out" for rate cuts https://t.co/ml1Kxoivxm pic.twitter.com/ayMJmqeViT
— Bloomberg Markets (@markets) June 14, 2023
Last Call for Early Bird Pricing to deBanked CONNECT San Diego
June 14, 2023
This is the LAST CALL for early bird pricing to deBanked CONNECT San Diego on September 21, 2023.
This will be deBanked’s third event in San Diego since 2018. Are you ready to connect with the industry on the west coast?!
New York Court of Appeals Dismisses Case That Challenged MCA Legality
June 13, 2023The New York Court of Appeals dismissed AH Wines Inc., et al. v C6 Capital Funding LLC. Its reasoning was brief.
“Appeal dismissed without costs, by the Court sua sponte, upon the ground that the issues presented have become moot,” the order says.
For a more complete understanding of the outcome, please contact an attorney.
Congressional Resolution Aims to Undo CFPB’s Small Business Lending Rules
June 12, 2023
After 13 years of regulatory debate and 888-pages of official rules finally ready to go into effect, some members of Congress have decided that the whole thing is all wrong. At issue is a section of a 2010 federal law that requires the CFPB to collect data from companies engaged in small business financing. However, for more than a decade the statute became a political football, creating delays and sowing confusion over who it is that is supposed to be covered. Lawsuits filed against the CFPB finally prompted it to move forward with its mandate which culminated in an 888-page rulebook that was published in March.
On May 31, however, members of the House and Senate introduced a Joint Resolution to invalidate the rules.
“Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Consumer Financial Protection Bureau relating to “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)” (88 Fed. Reg. 35150), and such rule shall have no force or effect.”
A hearing on the matter is scheduled to be heard on June 14 at 10am. As part of it, CFPB Director Rohit Chopra is expected to testify.
Update: Hearing is here:
It remains to be seen whether the Resolution will carry weight. There are 23 Republican co-sponsors of the bill and 0 Democrats.
Connecticut Passes Commercial Financing Disclosure Bill
June 7, 2023
Connecticut has passed a commercial financing disclosure bill. See: SB1032. The bill now just needs to be signed by the governor. The planned effective date is July 1, 2024.
Connecticut’s bill has several unique rules in addition to standard disclosures already seen in other states. They include:
1. A provider shall not revoke, withdraw or modify a specific offer until midnight of the third calendar day after the date of the specific offer.
2. Providers and brokers must register with the Banking Commissioner.
3. No commercial financing contract shall contain any provision waiving a recipient’s right to notice, judicial hearing or prior court order in connection with the provider obtaining any prejudgment remedy, including, but not limited to, attachment, execution, garnishment or replevin, upon commencing any litigation against the recipient.
The bill has been added to deBanked’s state regulation map.
Kate Fisher, Chris Murray Recipients of the Greg Nowak Impact Award
June 5, 2023
The Alternative Finance Bar Association selected two recipients for this year’s Greg Nowak Impact Award. They were Katherine C. Fisher, Partner of Hudson Cook, LLP and Christopher R. Murray, Managing Member of Murray Legal, PLLC. Winners are generally selected for their all-around efforts for the legal community both on matters of law and outside of it.
Greg Nowak, who passed away in 2021, was a partner of Troutman Pepper and a beloved founding member of the AFBA. The winner of last year’s award was David A. Picon, a Partner of Proskauer Rose LLP.
Block CEO Jack Dorsey Favors RFK Jr. For President
June 4, 2023Jack Dorsey, the former CEO of Twitter and current CEO of Block (aka Square), tweeted that Democratic candidate RFK Jr. could beat both Donald Trump and Ron DeSantis in the 2024 presidential election. When pressed what this meant, he replied that this was both a prediction and an endorsement.
Robert F. Kennedy Jr. is the son of Robert Kennedy who was assassinated in 1968.
He can and will https://t.co/zrKLc2BKhz
— jack (@jack) June 4, 2023
RFK Jr. is a strongly pro-bitcoin, pro-cryptocurrency candidate. A potential motive behind Dorsey’s support is that Block has not only cumulatively invested $220M in bitcoin itself but also that the company depends on selling bitcoin for nearly half of its overall revenue. Block recorded $7.1B in bitcoin revenue in 2022 and $10B in bitcoin revenue in 2021. That only amounted to 3% and 5% of the total gross profit for each year respectively, however.
RFK Jr. recently spoke at a bitcoin conference in Miami, he accepts campaign donations in bitcoin, and he was recently quoted as referring to bitcoin as “freedom money.”
Prosper Originates $631.9M in Q1
May 23, 2023Prosper Marketplace originated $631.9M in loans in the first quarter of 2023, up 13% YoY. Ninety percent of Prosper’s Q1 2023 loans were funded through their Whole Loan channel, down slightly from the 92% in Q4 2022. The company generated a loss of $9M on about $38M in revenue.
Prosper is one of the few fintech lenders from the ancient era to somewhat stick with its original business model. Although it moved away from peer-to-peer to Whole Loan sales, it did not become a bank like its competitors LendingClub and SoFi did. Prosper also seems to have stabilized after some tumultuous growth years in the pre-covid era.
