00:00.000 --> 00:01.830 Sean Murray: Interesting comments coming out of FTC 00:01.830 --> 00:05.190 Commissioner Rohit Chopra, about merchant cash advance companies. 00:05.400 --> 00:10.260 He said that he wants to "wipe them out." That today and more 00:10.290 --> 00:12.510 but first we're gonna go over to Jonny Fernandez in Manhattan 00:12.540 --> 00:15.150 with some big news about Facebook. 00:15.390 --> 00:17.070 Johny Fernandez: Hey Sean, so I'm standing right in front of 00:17.070 --> 00:19.920 the Farley Building just across the street from Penn Station. 00:20.070 --> 00:23.340 Now most people know this building as a major postal 00:23.340 --> 00:26.610 service hub, but it's now going to be used by new tenants, 00:26.640 --> 00:31.650 Facebook. Earlier this month, Facebook signed the lease for 00:31.650 --> 00:35.940 730,000 square feet of office space in the Farley building, 00:36.480 --> 00:40.980 located in Midtown and built in 1912, it received landmark 00:40.980 --> 00:46.110 status in 1966. Leasing so much office space in the city in the 00:46.110 --> 00:49.530 middle of a pandemic suggests that Facebook is thinking long 00:49.530 --> 00:53.460 term. And even if city dwellers flocked to the suburbs, its 00:53.460 --> 00:57.240 proximity to Penn Station will allow it to tap into residents 00:57.240 --> 01:01.350 that live in New Jersey and Long Island. It is important to note 01:01.350 --> 01:03.810 that this lease actually coincides with the announcement 01:03.810 --> 01:07.290 of a new Facebook unit called Facebook Financial. Now the idea 01:07.290 --> 01:10.590 behind it according to reports is that it will merge its social 01:10.590 --> 01:14.370 media platforms with e-commerce. So things like Instagram, 01:14.370 --> 01:18.120 Facebook and WhatsApp will now have a universal in-app payment 01:18.120 --> 01:21.540 feature. It's important to remember that Facebook owns 01:21.540 --> 01:25.890 multiple social apps. Facebook bought WhatsApp in 2014 and 01:25.890 --> 01:30.060 Instagram in 2012. And from where I'm standing, I will say 01:30.060 --> 01:33.480 it is ironic over the last several years people have called 01:33.480 --> 01:36.960 on the postal service to add some type of financial services 01:36.960 --> 01:40.350 to consumers. Metaphorically speaking, Facebook is now 01:40.350 --> 01:41.760 turning that into a reality. 01:41.880 --> 01:43.950 Speaker: It's everywhere. Now it's on your phone, you look up 01:43.950 --> 01:47.430 and they have a building right there too. So it's just kind of 01:47.520 --> 01:48.450 dominating. 01:48.570 --> 01:50.940 Opportunity is opportunity. If he's [Zuckerberg] looking to 01:50.940 --> 01:53.790 turn this into the next Silicon Valley. I mean, I don't know, 01:53.790 --> 01:57.510 how do we how do we really stop it? I mean, we all use Facebook, 01:57.510 --> 01:59.910 we all use Instagram. We can complain about it as much as 01:59.910 --> 02:01.440 possible. But we're using all the tools. 02:01.480 --> 02:05.410 They already know so much just on Facebook data mining, that 02:05.410 --> 02:10.000 them having access to even more would be, awful. 02:10.450 --> 02:12.220 Johny Fernandez: Reporting live here from the future Facebook 02:12.220 --> 02:14.860 offices. I'm Johny Fernandez with deBanked News. 02:14.000 --> 02:17.990 Sean Murray: Thanks Johny for sharing that. I liked it. 02:18.440 --> 02:21.350 Earlier this week, FTC Commissioner Rohit Chopra made 02:21.350 --> 02:23.840 some alarming comments in the NBC interview about merchant 02:23.840 --> 02:26.540 cash advance companies. When asked about some of their 02:26.540 --> 02:30.890 practices, he said, "we started suing some of them. And I'm 02:30.890 --> 02:33.320 looking for a systemic solution that makes sure that they can 02:33.320 --> 02:37.940 all be wiped out before they do more damage." I tweeted to 02:37.940 --> 02:40.250 Commissioner Chopra to find out if those statements would also 02:40.250 --> 02:43.700 apply to companies like Shopify and PayPal, now among the 02:43.700 --> 02:46.280 largest merchant cash advance providers in the entire country, 02:46.760 --> 02:50.120 but I've yet to get a response. Now his comments were not said 02:50.120 --> 02:52.970 off the cuff, earlier this month, in an official prepared 02:52.970 --> 02:56.390 statement, Commissioner Chopra said it was a serious question 02:56.390 --> 02:58.970 as to whether merchant cash advance products are actually 02:58.970 --> 03:02.840 closed end installment loans subject to federal and state 03:02.930 --> 03:06.290 protections. Now, it seems to suggest that the end goal is 03:06.290 --> 03:09.560 really about regulation. It's an initiative that the FTC embarked 03:09.560 --> 03:12.770 on late last year. The strong comments from the commissioner 03:12.950 --> 03:16.760 are probably about deterring bad actors. In an interview we 03:16.760 --> 03:20.030 conducted with FTC attorney Evan Zullow, we asked if it was 03:20.060 --> 03:23.510 unusual that an agency normally viewed as protecting consumers 03:23.900 --> 03:25.910 would become so focused on business-to-business 03:25.910 --> 03:29.090 transactions. Zullow told deBanked, "we don't think it's 03:29.090 --> 03:33.500 new or that we're in unchartered waters." All of which means that 03:33.500 --> 03:35.930 merchant cash advance companies should probably start operating 03:35.930 --> 03:40.010 their companies more like banks. But how to do that? Well, we 03:40.010 --> 03:42.860 spoke with one company who offers an all-in-one software 03:42.860 --> 03:46.550 solution that is catered towards credit unions, community banks, 03:46.610 --> 03:49.430 and even merchant cash advance companies. It's an all-in-one 03:49.430 --> 03:52.040 solution that's geared towards the small business finance 03:52.040 --> 03:56.780 universe. Sherif Hassan, the CEO of Capiform, told me all about 03:56.780 --> 03:56.930 it. 03:57.470 --> 04:00.080 Sherif Hassan: We're targeting the folks that are big enough 04:00.080 --> 04:03.440 where they can feel these pain points, but aren't so big that 04:03.440 --> 04:05.540 they have the technology in house to build out these 04:05.540 --> 04:09.080 solutions. You'd be surprised Sean, we could get a cash 04:09.080 --> 04:12.710 advance company up and running in less than 30 days. And the 04:12.710 --> 04:16.190 idea is, they would kind of institute a champion on their 04:16.190 --> 04:18.980 side. And it could be the head of risk or the lead underwriter 04:19.040 --> 04:23.000 or someone who understands their credit policy really well. And 04:23.030 --> 04:25.730 we take them through a certification program as we're 04:25.730 --> 04:30.500 going through the build. And once it's up and running, you'd 04:30.500 --> 04:34.280 be shocked at how easy it is for them to modify, or to adjust 04:34.280 --> 04:37.760 their credit policies. We did a ton of market research and 04:37.760 --> 04:40.490 seeing what other other folks have built and how their 04:40.490 --> 04:43.430 processes are. And we've really done our best to kind of pick 04:43.430 --> 04:48.410 and choose what the best of them are. So we get compliments as as 04:48.410 --> 04:51.140 grand as "my God this looks better than the Chase website" 04:51.140 --> 04:53.630 and folks are saying, "I can't believe this only take us 30 04:53.630 --> 04:56.810 days to get up and running" to something like you know, first 04:56.810 --> 04:59.690 show would be you know, "I don't know this looks great and all 04:59.690 --> 05:01.970 but I don't know If we can afford it," and then we'll talk 05:01.970 --> 05:04.460 about pricing and our pricing is super competitive. 05:04.790 --> 05:07.640 Sean Murray: What a cool product. Thanks for your time. 05:07.640 --> 05:10.910 Really appreciate it. That's all today from the studio. I'm Sean 05:10.910 --> 05:12.710 Murray for deBanked News.