Sean Murray: Interesting comments coming out of FTC
Commissioner Rohit Chopra, about merchant cash advance companies.
He said that he wants to "wipe them out." That today and more
but first we're gonna go over to Jonny Fernandez in Manhattan
with some big news about Facebook.
Johny Fernandez: Hey Sean, so I'm standing right in front of
the Farley Building just across the street from Penn Station.
Now most people know this building as a major postal
service hub, but it's now going to be used by new tenants,
Facebook. Earlier this month, Facebook signed the lease for
730,000 square feet of office space in the Farley building,
located in Midtown and built in 1912, it received landmark
status in 1966. Leasing so much office space in the city in the
middle of a pandemic suggests that Facebook is thinking long
term. And even if city dwellers flocked to the suburbs, its
proximity to Penn Station will allow it to tap into residents
that live in New Jersey and Long Island. It is important to note
that this lease actually coincides with the announcement
of a new Facebook unit called Facebook Financial. Now the idea
behind it according to reports is that it will merge its social
media platforms with e-commerce. So things like Instagram,
Facebook and WhatsApp will now have a universal in-app payment
feature. It's important to remember that Facebook owns
multiple social apps. Facebook bought WhatsApp in 2014 and
Instagram in 2012. And from where I'm standing, I will say
it is ironic over the last several years people have called
on the postal service to add some type of financial services
to consumers. Metaphorically speaking, Facebook is now
turning that into a reality.
Speaker: It's everywhere. Now it's on your phone, you look up
and they have a building right there too. So it's just kind of
dominating.
Opportunity is opportunity. If he's [Zuckerberg] looking to
turn this into the next Silicon Valley. I mean, I don't know,
how do we how do we really stop it? I mean, we all use Facebook,
we all use Instagram. We can complain about it as much as
possible. But we're using all the tools.
They already know so much just on Facebook data mining, that
them having access to even more would be, awful.
Johny Fernandez: Reporting live here from the future Facebook
offices. I'm Johny Fernandez with deBanked News.
Sean Murray: Thanks Johny for sharing that. I liked it.
Earlier this week, FTC Commissioner Rohit Chopra made
some alarming comments in the NBC interview about merchant
cash advance companies. When asked about some of their
practices, he said, "we started suing some of them. And I'm
looking for a systemic solution that makes sure that they can
all be wiped out before they do more damage." I tweeted to
Commissioner Chopra to find out if those statements would also
apply to companies like Shopify and PayPal, now among the
largest merchant cash advance providers in the entire country,
but I've yet to get a response. Now his comments were not said
off the cuff, earlier this month, in an official prepared
statement, Commissioner Chopra said it was a serious question
as to whether merchant cash advance products are actually
closed end installment loans subject to federal and state
protections. Now, it seems to suggest that the end goal is
really about regulation. It's an initiative that the FTC embarked
on late last year. The strong comments from the commissioner
are probably about deterring bad actors. In an interview we
conducted with FTC attorney Evan Zullow, we asked if it was
unusual that an agency normally viewed as protecting consumers
would become so focused on business-to-business
transactions. Zullow told deBanked, "we don't think it's
new or that we're in unchartered waters." All of which means that
merchant cash advance companies should probably start operating
their companies more like banks. But how to do that? Well, we
spoke with one company who offers an all-in-one software
solution that is catered towards credit unions, community banks,
and even merchant cash advance companies. It's an all-in-one
solution that's geared towards the small business finance
universe. Sherif Hassan, the CEO of Capiform, told me all about
it.
Sherif Hassan: We're targeting the folks that are big enough
where they can feel these pain points, but aren't so big that
they have the technology in house to build out these
solutions. You'd be surprised Sean, we could get a cash
advance company up and running in less than 30 days. And the
idea is, they would kind of institute a champion on their
side. And it could be the head of risk or the lead underwriter
or someone who understands their credit policy really well. And
we take them through a certification program as we're
going through the build. And once it's up and running, you'd
be shocked at how easy it is for them to modify, or to adjust
their credit policies. We did a ton of market research and
seeing what other other folks have built and how their
processes are. And we've really done our best to kind of pick
and choose what the best of them are. So we get compliments as as
grand as "my God this looks better than the Chase website"
and folks are saying, "I can't believe this only take us 30
days to get up and running" to something like you know, first
show would be you know, "I don't know this looks great and all
but I don't know If we can afford it," and then we'll talk
about pricing and our pricing is super competitive.
Sean Murray: What a cool product. Thanks for your time.
Really appreciate it. That's all today from the studio. I'm Sean
Murray for deBanked News.