1 00:00:01,920 --> 00:00:07,950 Sean Murray: I think that means we're live. Okay. Hello. 2 00:00:08,830 --> 00:00:10,270 Johny Fernandez: You guys welcome back. I'm Johny 3 00:00:10,270 --> 00:00:11,050 Fernandez. 4 00:00:11,320 --> 00:00:13,300 Sean Murray: I'm Sean Murray with deBanked. Thanks for 5 00:00:13,300 --> 00:00:14,200 joining us again. 6 00:00:14,560 --> 00:00:17,050 Johny Fernandez: So Sean, let's um, how are you? I know last 7 00:00:17,050 --> 00:00:19,750 time you were here alone. So now we're back. 8 00:00:20,050 --> 00:00:21,790 Sean Murray: And you look a little tan. You go somewhere? 9 00:00:21,820 --> 00:00:23,410 Johny Fernandez: I did. I was down in Miami. 10 00:00:23,440 --> 00:00:23,800 Sean Murray: Oh, yeah. 11 00:00:23,830 --> 00:00:25,660 Johny Fernandez: So we have a special coming up. So it's 12 00:00:25,660 --> 00:00:27,310 exciting. We're working on that. 13 00:00:27,340 --> 00:00:29,470 Sean Murray: Did you? Did you interview anyone special too? 14 00:00:29,510 --> 00:00:31,850 Johny Fernandez: We did, we ended up interviewing Miami's 15 00:00:31,850 --> 00:00:35,660 mayor. So that's exciting. He has a lot of interesting things 16 00:00:35,660 --> 00:00:38,090 to say about what's going on the business and the industry and 17 00:00:38,090 --> 00:00:41,480 FinTech. So everything down there, what's going on down 18 00:00:41,480 --> 00:00:45,110 there? We're gonna preview that and kind of give the whole story 19 00:00:45,111 --> 00:00:47,030 later on in the week. So that's exciting. 20 00:00:47,031 --> 00:00:48,650 Sean Murray: It should definitely be. 21 00:00:48,710 --> 00:00:50,870 Johny Fernandez: Yeah, and it's also seeing all the changes. And 22 00:00:51,110 --> 00:00:53,780 we'd also spoke with different business owners down there. So 23 00:00:53,780 --> 00:00:57,260 it's definitely a piece that I'm excited to work on. 24 00:00:57,350 --> 00:00:58,970 Sean Murray: Awesome. Well, I can't wait to show it to 25 00:00:58,970 --> 00:00:59,450 everybody. 26 00:00:59,480 --> 00:01:01,160 Johny Fernandez: Yeah, so it's gonna be a good one. It's gonna 27 00:01:01,160 --> 00:01:05,630 be definitely gonna be a good one. So, but big, big Monday, 28 00:01:05,630 --> 00:01:09,710 busy Monday, so let's start with LoanMe. LoanMe has been 29 00:01:09,710 --> 00:01:12,470 acquired. That's big breaking news. So why don't we talk a 30 00:01:12,470 --> 00:01:14,930 little about that, that announcement that was made by 31 00:01:14,930 --> 00:01:16,040 NextPoint. So 32 00:01:16,040 --> 00:01:16,640 Sean Murray: Sure. 33 00:01:16,760 --> 00:01:17,120 Johny Fernandez: Good. 34 00:01:17,690 --> 00:01:20,810 Sean Murray: Sure. So NextPoint is essentially a newly created 35 00:01:20,810 --> 00:01:25,280 company. It didn't really exist before it was formulated out out 36 00:01:25,280 --> 00:01:34,190 of a PAC. Not a PAC is SPAC. Thinking politics. SPAC. And 37 00:01:34,580 --> 00:01:37,670 this company was formed, I believe in October, November of 38 00:01:37,670 --> 00:01:38,450 last year, 39 00:01:38,690 --> 00:01:39,560 Johny Fernandez: Oh it's fairly new. 40 00:01:39,830 --> 00:01:41,780 Sean Murray: Yeah. And it was it was a joint acquisition they 41 00:01:41,780 --> 00:01:44,630 acquired not only LoanMe, but also Liberty, Liberty Tax. 42 00:01:44,720 --> 00:01:45,020 Johny Fernandez: Okay. 43 00:01:45,050 --> 00:01:46,580 Sean Murray: Are you familiar with Liberty Tax like they have 44 00:01:46,581 --> 00:01:48,850 Johny Fernandez: The Statue of Liberty is their icon. 45 00:01:49,090 --> 00:01:51,490 Sean Murray: It's their icon, and they have storefronts all 46 00:01:51,490 --> 00:01:55,870 over the country. And they actually have the Liberty Mascot 47 00:01:55,870 --> 00:01:57,340 where you can actually see people on the side of the road 48 00:01:57,340 --> 00:02:02,500 wearing statues. Full costume. And so that's now going to be 49 00:02:02,500 --> 00:02:06,700 part of like the the LoanMe family. And they're now combined 50 00:02:06,700 --> 00:02:09,730 and called NextPoint or NextPoint Financial. 51 00:02:09,750 --> 00:02:13,080 Johny Fernandez: Yeah. So it's a good combination of both 52 00:02:13,290 --> 00:02:14,370 NextPoint and 53 00:02:14,910 --> 00:02:19,320 Sean Murray: Of the tax and the lending business, right. So I 54 00:02:19,320 --> 00:02:21,690 was actually asked to write, in the news just came out today, 55 00:02:21,750 --> 00:02:24,840 right. So we only we only have so much information. It was 56 00:02:24,840 --> 00:02:28,650 disclosed publicly, they filed on the, it's they're listed on 57 00:02:28,650 --> 00:02:31,440 the Toronto Stock Exchange, and all that information is public. 58 00:02:31,830 --> 00:02:36,480 So there's like 38 pages of the 38 page investor presentation 59 00:02:36,480 --> 00:02:39,420 online, that anyone can go and check out we have it up on our 60 00:02:39,420 --> 00:02:42,060 site, actually go to deBanked.com you can find a link 61 00:02:42,060 --> 00:02:45,060 to the 38 page investor presentation. And you can read 62 00:02:45,060 --> 00:02:47,400 the whole thing, find out all the details about what the 63 00:02:47,400 --> 00:02:51,000 combined two companies will mean. Of course, people already 64 00:02:51,000 --> 00:02:52,350 asking me what does it mean? 65 00:02:52,410 --> 00:02:52,800 Johny Fernandez: Yeah 66 00:02:52,830 --> 00:02:55,860 Sean Murray: And it's really, you know, how the two of you 67 00:02:55,860 --> 00:02:56,460 makes sense. 68 00:02:56,460 --> 00:02:56,850 Johny Fernandez: Yeah. 69 00:02:57,030 --> 00:02:58,350 Sean Murray: You know, you think Liberty Tax. 70 00:02:58,350 --> 00:02:58,590 Johny Fernandez: Yeah. 71 00:02:58,620 --> 00:03:00,330 Sean Murray: Right. Everyone knows that. And then on the 72 00:03:00,330 --> 00:03:02,610 other side, all of a sudden, you have this company called LoanMe 73 00:03:02,640 --> 00:03:06,570 does, they actually do consumer loans and business loans, and as 74 00:03:06,570 --> 00:03:10,080 they recently disclosed, they also do a little bit of MCA, as 75 00:03:10,080 --> 00:03:13,890 well. But how did the two, how did the two really like, you 76 00:03:13,890 --> 00:03:18,570 know, what's the sort of the way that they mesh? It's a it, comes 77 00:03:18,570 --> 00:03:24,360 down to Liberty Taxes business, because a lot of people go into 78 00:03:24,360 --> 00:03:28,170 an actual tax, they go to a tax office to file their taxes at 79 00:03:28,170 --> 00:03:31,980 the end of every year, like an H&R Block. Yeah. And that puts 80 00:03:31,980 --> 00:03:34,530 them in touch with a lot of business owners. And I think 81 00:03:34,530 --> 00:03:40,020 they actually disclose that they work with about 485,000 small 82 00:03:40,020 --> 00:03:45,960 businesses every year, this is Liberty Tax. So you have 485,000 83 00:03:45,960 --> 00:03:48,240 small businesses every year using Liberty Tax to file their 84 00:03:48,240 --> 00:03:51,450 returns. And guess what, it's very popular to try to get a 85 00:03:51,450 --> 00:03:55,080 loan on your future, you know, your future return. Right. 86 00:03:55,350 --> 00:03:58,950 So, you know, in terms of making an all in one stop, you can also 87 00:03:58,950 --> 00:04:01,650 get funded presumably at least apply for a LoanMe loan. 88 00:04:01,690 --> 00:04:02,140 Johny Fernandez: Yeah. 89 00:04:02,320 --> 00:04:04,390 Sean Murray: At the at the office there. 90 00:04:06,130 --> 00:04:08,950 Johny Fernandez: You know, something that they, the company 91 00:04:08,950 --> 00:04:13,420 said from this is from their actual statement, it said they 92 00:04:13,420 --> 00:04:16,000 are "A one stop financial services, destination, 93 00:04:16,300 --> 00:04:19,000 empowering, hardworking and credit challenged consumers and 94 00:04:19,000 --> 00:04:22,420 small businesses to go to the NextPoint in the financial 95 00:04:22,420 --> 00:04:22,810 future." 96 00:04:22,840 --> 00:04:24,640 Sean Murray: Ok good, so that's where the NextPoint comes from. 97 00:04:24,640 --> 00:04:27,370 I didn't know totally even missed that part. But yeah, that 98 00:04:27,370 --> 00:04:31,450 all makes sense. And I think it's interesting that in the 99 00:04:31,450 --> 00:04:34,450 world of FinTech, that this deal essentially merges an online 100 00:04:34,450 --> 00:04:38,950 lender with a storefront business. I know that when 101 00:04:38,950 --> 00:04:42,130 people are filing their taxes, you can use an online software. 102 00:04:42,160 --> 00:04:45,340 Yeah, but a lot of people still choose to go to the storefront 103 00:04:45,700 --> 00:04:50,920 Tax Office, right? And so who their competition be? Well, 104 00:04:50,950 --> 00:04:53,680 it's not the first time that we've had a tax company merged 105 00:04:53,680 --> 00:04:58,090 with an online lender we have Intuit with QuickBooks. 106 00:04:58,510 --> 00:05:01,420 QuickBooks is very popular account software, a tax 107 00:05:01,420 --> 00:05:05,650 software. And they have their own online lending arm called 108 00:05:06,010 --> 00:05:10,120 QuickBooks Capital. And so they've already merged the two 109 00:05:10,120 --> 00:05:13,720 successfully. So I'm not surprised to see Liberty Tax 110 00:05:14,020 --> 00:05:18,130 merge with, you know, with LoanMe. And I think this is the 111 00:05:18,130 --> 00:05:21,610 first case, though, that we're seeing that an online lender has 112 00:05:21,610 --> 00:05:24,670 merged with a storefront. Yes, if I'm not mistaken, that 113 00:05:24,670 --> 00:05:27,700 that part of it is, is pretty uncommon. But the pairing of two 114 00:05:27,700 --> 00:05:30,820 different things to try to create an ecosystem is not that 115 00:05:31,360 --> 00:05:34,030 is not that strange, you know, we have Square with payments, 116 00:05:34,330 --> 00:05:38,260 and loans. And, you know, we have other other companies that 117 00:05:38,260 --> 00:05:40,270 are trying to merge two different things together. 118 00:05:40,270 --> 00:05:42,700 And so that they're not just an online lender, there's something 119 00:05:42,700 --> 00:05:44,950 else too good way to diversify your business. 120 00:05:44,980 --> 00:05:46,480 Johny Fernandez: Do you think this is something that we can 121 00:05:46,480 --> 00:05:49,540 start seeing more often, like, as you move into the future that 122 00:05:49,540 --> 00:05:52,210 these type of companies are merging together? Or do you 123 00:05:52,210 --> 00:05:54,580 think this is gonna be like, you know, they're just trying this 124 00:05:54,580 --> 00:05:57,250 out? And like you said, just creating something new, will 125 00:05:57,251 --> 00:05:58,990 people follow? Will businesses follow 126 00:05:58,991 --> 00:06:03,340 Sean Murray: I definitely think we'll see more. And I think, for 127 00:06:03,340 --> 00:06:07,660 a long period of time, people, expected online lenders to 128 00:06:07,660 --> 00:06:11,140 acquire other online lenders. But there's really no point to 129 00:06:11,140 --> 00:06:14,980 that unless they do something entirely different than what the 130 00:06:14,980 --> 00:06:19,270 other company already does. And so I think we'll see more online 131 00:06:19,270 --> 00:06:23,500 lenders merge with companies that offer a different type of 132 00:06:23,950 --> 00:06:28,330 business facing product, right? Like QuickBooks Capital, they 133 00:06:28,330 --> 00:06:32,710 lead in with their QuickBooks software, the Intuit QuickBooks 134 00:06:32,710 --> 00:06:36,370 software, and then you can get a QuickBooks Capital loan, but 135 00:06:36,370 --> 00:06:39,730 their business is really the software first, right? It's kind 136 00:06:39,730 --> 00:06:42,220 of like that with Square, you use square for payments, and 137 00:06:42,220 --> 00:06:45,550 then you can add the capital portion to it. That's really the 138 00:06:45,550 --> 00:06:47,770 best way to beat from a diversification standpoint, 139 00:06:47,770 --> 00:06:50,080 because if you have another pandemic, and you're a lending 140 00:06:50,080 --> 00:06:53,800 company only, or an MCA funding company only, and you have 141 00:06:53,800 --> 00:06:56,260 nothing else, well, then you're going to be in a lot of trouble. 142 00:06:56,260 --> 00:07:00,130 And that's what we've actually seen. A good example is OnDeck. 143 00:07:00,880 --> 00:07:04,840 One of the few online FinTech companies, that was pure lending 144 00:07:04,870 --> 00:07:07,240 didn't really have anything else. And of course, when the 145 00:07:07,240 --> 00:07:10,720 pandemic hit, they suffered greatly. And so they were 146 00:07:10,720 --> 00:07:14,470 acquired, but it was more of a more of a distressed, you know, 147 00:07:14,470 --> 00:07:18,220 acquisition type situation. And, yeah, so I think 148 00:07:18,220 --> 00:07:21,490 we'll see more online lending companies merged with companies 149 00:07:21,490 --> 00:07:24,970 that can offer a business facing product, and the lending kind of 150 00:07:24,970 --> 00:07:26,920 becomes an ancillary value add. 151 00:07:27,040 --> 00:07:29,920 Johny Fernandez: Yeah. To me is to see what happens, and how can 152 00:07:29,920 --> 00:07:33,910 they move forward? So for sure. So the next story is something 153 00:07:33,910 --> 00:07:36,280 that caught my attention. And we've been talking about it here 154 00:07:36,280 --> 00:07:40,210 in the office is a big league advanced to baseball players. So 155 00:07:40,750 --> 00:07:43,120 it's something that you just found out about not that long 156 00:07:43,120 --> 00:07:46,240 ago. And it's been around since 2016. So it's been around for a 157 00:07:46,240 --> 00:07:49,840 while. So let's go ahead and start talking about that kind of 158 00:07:50,080 --> 00:07:53,290 just a concept that it's not a merchant cash advance, but it's 159 00:07:53,290 --> 00:07:58,030 a big league advance. And the deal pretty much it's 160 00:07:58,030 --> 00:08:01,330 specifically geared towards baseball players. Walk us 161 00:08:01,330 --> 00:08:01,810 through that. 162 00:08:01,850 --> 00:08:04,100 Sean Murray: Sure. Yeah. So everyone, all of our viewers are 163 00:08:04,100 --> 00:08:07,100 more or less familiar with merchant cash advances. We've 164 00:08:07,100 --> 00:08:09,890 now learned about something else called a big league advance. 165 00:08:09,950 --> 00:08:13,280 It's very, very, very similar to a merchant cash advance, but 166 00:08:13,280 --> 00:08:16,610 it's directed at baseball players, as you mentioned, it's 167 00:08:16,610 --> 00:08:19,700 directed primarily at minor league players, is my 168 00:08:19,700 --> 00:08:23,060 understanding. And what they're offering is essentially capital 169 00:08:23,090 --> 00:08:25,400 upfront, because you're if you're a minor league player, 170 00:08:25,730 --> 00:08:27,860 you really don't make that much money. I've heard you can 171 00:08:27,860 --> 00:08:31,670 make like, you know, $1,000 a month or something. Right? 172 00:08:31,700 --> 00:08:33,980 It's you can't live off it. Yeah, you have to have another 173 00:08:33,980 --> 00:08:37,070 job. You know what I mean? If you don't have a big, you're not 174 00:08:37,070 --> 00:08:39,620 like a trust fund kid. Yeah, I don't know how many minor league 175 00:08:39,620 --> 00:08:43,910 players or bares.But what this company will do Big League 176 00:08:43,910 --> 00:08:46,820 Advance, and I didn't speak to them. So this isn't comments 177 00:08:46,820 --> 00:08:49,550 that were sent to me. It's based upon what I was able to read on 178 00:08:49,550 --> 00:08:53,000 their own website. But they will essentially give a minor league 179 00:08:53,000 --> 00:08:56,840 player a large sum of capital upfront, and in return, they 180 00:08:56,840 --> 00:09:00,080 sign away a percentage of whatever earnings, they'll get 181 00:09:00,080 --> 00:09:03,860 it, they end up signing an MLB contract. So if your minor league 182 00:09:03,860 --> 00:09:06,470 player you could get offered, I don't know, let's say half 183 00:09:06,470 --> 00:09:08,900 million dollars, maybe maybe, maybe less than that. Right? 184 00:09:08,900 --> 00:09:11,390 Yeah. And if you're not making very much half million dollars 185 00:09:11,390 --> 00:09:14,090 up front sounds pretty good. Yeah. So the trade off to that 186 00:09:14,090 --> 00:09:17,630 is, while if you end up becoming a major league player, a 187 00:09:17,630 --> 00:09:20,240 percentage of the contract that whatever you earn, whatever you 188 00:09:20,240 --> 00:09:22,460 signed for, will go to the company that gave you that 189 00:09:22,460 --> 00:09:26,420 money. If you never make the pros, you never get signed by a 190 00:09:26,420 --> 00:09:29,720 major league team, then you don't owe anything at all. So 191 00:09:29,720 --> 00:09:32,000 it's a pretty good trade off to be a minor league player to get 192 00:09:32,000 --> 00:09:36,440 this huge sum of money. Knowing that, hey, if you never go pro, 193 00:09:36,890 --> 00:09:39,080 you don't owe anything back. So imagine the amount was like 194 00:09:39,080 --> 00:09:39,800 500k? 195 00:09:39,860 --> 00:09:40,220 Johny Fernandez: Yeah. 196 00:09:41,360 --> 00:09:43,460 Sean Murray: And they're like, hey, if you become Pro, you 197 00:09:43,460 --> 00:09:46,100 know, then we're gonna need like, 8% of all your future MLB 198 00:09:46,100 --> 00:09:48,500 earnings. That might sound pretty good. 199 00:09:48,560 --> 00:09:52,430 But the reason you brought it up is because the biggest news 200 00:09:52,430 --> 00:09:54,920 right now is that we have a player for the Padres who signed 201 00:09:54,920 --> 00:09:57,410 a 14 year contract for $340 million 202 00:09:58,340 --> 00:10:02,180 Johny Fernandez: And their cut gets out, and if he, their cut is 203 00:10:02,180 --> 00:10:03,980 potentially going to be as much as 30 million. 204 00:10:04,140 --> 00:10:06,480 Sean Murray: Yeah. And so the way where that number comes from 205 00:10:06,480 --> 00:10:10,380 is that I think they take up 10 perce- this is all agreed upon 206 00:10:10,470 --> 00:10:12,870 at the time that they're doing the contract- they take up to 207 00:10:12,870 --> 00:10:19,710 10% of your future earnings, but the average they say is 8%. So I 208 00:10:19,710 --> 00:10:23,400 think the $30 million numbers roughly 8%, like $300 or 209 00:10:23,970 --> 00:10:27,150 $340 million. It could be less, it could even be a little bit 210 00:10:27,150 --> 00:10:30,120 more. But it's somewhere in that neighborhood of what he's going 211 00:10:30,120 --> 00:10:33,180 to have to give to Big League Advance. So, of course, it's in 212 00:10:33,180 --> 00:10:36,210 the news, because, you know, because everyone's wondering, is 213 00:10:36,210 --> 00:10:39,000 this deal worth it? This player signed this amazing contract, 214 00:10:39,000 --> 00:10:41,700 and from what I understand, it's kind of a landmark, a landmark 215 00:10:41,700 --> 00:10:45,450 deal. All of a sudden, over 14 years, he's got a fork over 30 216 00:10:45,720 --> 00:10:48,150 some million dollars over two Big League Advance and like, 217 00:10:48,150 --> 00:10:50,850 well, what did he get for it? My understanding was that he was 218 00:10:50,850 --> 00:10:53,190 pretty happy that some of these players are actually pretty 219 00:10:53,190 --> 00:10:56,250 happy with it. And I haven't heard any I haven't heard any 220 00:10:56,250 --> 00:10:59,280 regret stories. I did hear I did hear one, yeah, there was a 221 00:10:59,280 --> 00:11:01,590 there was a lawsuit or something filed, but he ended up 222 00:11:01,590 --> 00:11:06,090 apologizing to the company. So you know, it seems like this is 223 00:11:06,090 --> 00:11:09,930 a pretty good product that baseball players could benefit 224 00:11:09,930 --> 00:11:10,230 from. 225 00:11:10,260 --> 00:11:12,480 Johny Fernandez: Yeah, and it's interesting, because we - you've 226 00:11:12,480 --> 00:11:14,880 heard this and I've heard this that like a lot of baseball 227 00:11:14,880 --> 00:11:18,390 players, a lot of athletes, like once the money is gone. Like 228 00:11:18,390 --> 00:11:21,990 some of them just go completely broke. Yeah, and you know, but 229 00:11:22,200 --> 00:11:25,800 this is definitely an interesting way. You know, to I 230 00:11:25,800 --> 00:11:28,530 mean, if they make it, you know, they don't make it then, you 231 00:11:28,530 --> 00:11:28,800 know, 232 00:11:28,870 --> 00:11:30,220 Sean Murray: What's your favorite baseball team? 233 00:11:33,700 --> 00:11:36,820 I don't know. Cuz then we might have rivals here in the studio. 234 00:11:37,180 --> 00:11:37,780 What's yours? 235 00:11:37,840 --> 00:11:38,920 Yankees? Okay. 236 00:11:38,921 --> 00:11:42,830 Johny Fernandez: I go Yankees. I'm not a big Mets guy. Okay, I 237 00:11:42,830 --> 00:11:45,080 didn't grow up with the Mets, grew up towards the Yankees. But 238 00:11:45,080 --> 00:11:48,380 I know that's like, depending on who you're with, and it can 239 00:11:48,380 --> 00:11:50,090 divide a whole room. So. 240 00:11:50,740 --> 00:11:53,470 Sean Murray: That's true. I am not a Yankee fan to an extent 241 00:11:53,471 --> 00:11:56,290 that I hate other teams. 242 00:11:56,291 --> 00:11:56,510 Johny Fernandez: Yeah. 243 00:11:56,511 --> 00:11:57,958 Sean Murray: You know, I know. It's no, because it's like, the 244 00:11:57,988 --> 00:11:59,726 only thing I can say. Because, you know, we're gonna we're 245 00:12:01,850 --> 00:12:03,800 gonna offend part of the audience, I grew up in. I grew 246 00:12:03,800 --> 00:12:07,010 up in New York, you know what I mean? So, I'm a Yankees fan. But 247 00:12:07,010 --> 00:12:11,540 if somebody say a Red Sox fan or something, it doesn't mean like 248 00:12:11,540 --> 00:12:13,940 a somebody from the Boston area likes the Red Sox, 249 00:12:13,970 --> 00:12:16,040 Johny Fernandez: but even here locally, with the subway series 250 00:12:16,250 --> 00:12:17,930 you either choose the Yankees or the Mets. 251 00:12:18,260 --> 00:12:20,420 Sean Murray: But I don't hate Met fans, but I know that 252 00:12:20,420 --> 00:12:24,440 they're people that take it to the extreme. Canceled deBanked, 253 00:12:24,470 --> 00:12:39,770 Sean says he likes the Yankees, Red Sox rule. I'm in trouble. 254 00:12:39,770 --> 00:12:40,910 Yeah, I just got canceled. 255 00:12:45,770 --> 00:12:50,120 Johny Fernandez: Alright that's good. And so the next thing is 256 00:12:50,810 --> 00:12:56,000 in regards to the MCA, and prohibition in Maryland, so the 257 00:12:56,000 --> 00:12:59,990 new house bill passed. House Bill 664, so Sean, let's go 258 00:12:59,990 --> 00:13:02,180 ahead and jump in straight on that because that's something 259 00:13:02,180 --> 00:13:07,040 that it's seems very similar to something that passed here in 260 00:13:07,040 --> 00:13:07,730 New York. 261 00:13:08,320 --> 00:13:10,570 Sean Murray: Right? Yeah, it does. So what you're referring 262 00:13:10,570 --> 00:13:14,260 to is the bill in the Maryland State Legislature that was a 263 00:13:14,260 --> 00:13:17,380 state, statewide bill that stands to only affect the state 264 00:13:17,380 --> 00:13:21,730 of Maryland, not the rest of the country. Maryland interesting in 265 00:13:21,730 --> 00:13:25,660 that last year, it proposed members of the legislature, not 266 00:13:25,660 --> 00:13:30,970 the whole state, but members of the legislature proposed a a law 267 00:13:31,090 --> 00:13:35,560 that would ban outright ban, merchant cash advance products 268 00:13:35,590 --> 00:13:40,600 very, very strange and narrow bill, usually when you have a 269 00:13:40,600 --> 00:13:45,160 bill that's that's aimed at alternative finance, they kind 270 00:13:45,160 --> 00:13:48,850 of try to get everything at once. Small Business Loans 271 00:13:48,850 --> 00:13:52,630 factoring equipment leasing, MCA, right is because they're 272 00:13:52,630 --> 00:13:55,870 trying to standardize things or, you know, make things uniform, 273 00:13:56,200 --> 00:14:00,490 or enhanced disclosures. So it's very strange last year, to see a 274 00:14:00,490 --> 00:14:04,060 bill that would actually try to ban I mean, they call it the 275 00:14:04,060 --> 00:14:07,570 merchant cash advance prohibition bill. Very strange. 276 00:14:07,660 --> 00:14:10,600 I mean, like somebody in Maryland really hates the 277 00:14:10,600 --> 00:14:13,420 merchant cash advance. And so that bill ended up dying, 278 00:14:14,770 --> 00:14:18,160 potentially, because of COVID kind of took over the whole 279 00:14:18,160 --> 00:14:20,950 conversation. And the bill never made it out of committee. So 280 00:14:20,950 --> 00:14:25,960 never voted on in the floor. The bill is back, more or less, it's 281 00:14:25,960 --> 00:14:29,890 not called merchant cash advance prohibition. Now, it's got this 282 00:14:29,890 --> 00:14:34,120 whole other whole other name that purports to look like it's 283 00:14:34,120 --> 00:14:36,760 a disclosure bill, which is what happened in New York, they 284 00:14:36,760 --> 00:14:40,300 passed the disclosure bill that mandates that you have to 285 00:14:40,300 --> 00:14:43,630 disclose an APR, even if one can't be calculated. If you 286 00:14:43,630 --> 00:14:46,210 can't calculate one, you have to estimate one so it wasn't that 287 00:14:46,210 --> 00:14:48,580 weird to see that in this bill. You know, like, oh, let's look 288 00:14:48,580 --> 00:14:51,340 at New York to see what they what they're doing. But this one 289 00:14:51,340 --> 00:14:54,880 goes one step further. It says that, when you estimate your 290 00:14:54,880 --> 00:14:58,540 APR, that's all good and fine, but the max estimate can only be 291 00:14:58,540 --> 00:15:02,920 24%. If it's beyond 24%, it's illegal to the point where you 292 00:15:02,920 --> 00:15:05,290 could actually end up going going to jail if you do a 293 00:15:05,290 --> 00:15:07,210 transaction that that exceeds that number. 294 00:15:08,740 --> 00:15:12,640 Johny Fernandez: It's like half New York shut down MCA. 295 00:15:12,690 --> 00:15:15,750 Sean Murray: Well, yeah, you know, and I, you know, it's 296 00:15:15,750 --> 00:15:18,030 weird how they picked the 24% of the I don't know what that 297 00:15:18,030 --> 00:15:22,170 number is supposed to represent. Because the number that 298 00:15:22,170 --> 00:15:25,320 represents the threshold for fairness that I've come across 299 00:15:25,320 --> 00:15:29,310 most often seems to be 36%. I don't know how that number came 300 00:15:29,310 --> 00:15:31,350 about. Yeah. But when you hear about regulating, when you hear 301 00:15:31,350 --> 00:15:35,130 about interest rate caps, you usually hear about 36% APR and 302 00:15:35,130 --> 00:15:38,190 never heard one that said, 24%. Now we do have something in New 303 00:15:38,190 --> 00:15:44,730 York that says you can't lend above 16% APR. Or you need some 304 00:15:44,730 --> 00:15:48,000 sort of, you know, license or something like that. But I've 305 00:15:48,000 --> 00:15:50,220 never heard of that. The Maryland thing is very strange. 306 00:15:50,280 --> 00:15:54,930 And also, it only attempts to do this for merchant cash advance. 307 00:15:55,140 --> 00:15:59,070 This isn't a business loan, disclosure bill. Yeah, it's not 308 00:15:59,070 --> 00:16:03,390 a broker, you know, like licensing, but well, it is like 309 00:16:03,420 --> 00:16:06,360 it requires licensing and all this other stuff. But it what it 310 00:16:06,360 --> 00:16:09,360 really effectively tries to do is prohibit merchant cash 311 00:16:09,360 --> 00:16:12,570 advances from being transacted in the state. I don't really 312 00:16:12,570 --> 00:16:16,170 know why. There was a hearing that took place, it was a live 313 00:16:16,170 --> 00:16:20,910 public hearing copy of it is up on our website. And we got to 314 00:16:20,910 --> 00:16:24,240 hear a little bit of a discussion on this bill. And 315 00:16:24,240 --> 00:16:26,160 there were members from representatives from the 316 00:16:26,160 --> 00:16:30,090 industry in the MCA industry, as well as some members of the 317 00:16:30,090 --> 00:16:33,270 state's legislature also talking, and then we'll get to 318 00:16:33,270 --> 00:16:37,680 kind of say what their piece was. And I don't really feel 319 00:16:37,680 --> 00:16:41,760 like there were any arguments put forward for the member who 320 00:16:41,760 --> 00:16:45,300 proposed the law, it seemed to me that I want to 321 00:16:45,300 --> 00:16:48,210 mischaracterize you. And I mean, I was just an observer of it. 322 00:16:48,210 --> 00:16:53,640 But it seemed to me like he was seeking the information, kind of 323 00:16:53,640 --> 00:16:57,780 like, let's kind of propose a band first, and then let me find 324 00:16:57,780 --> 00:17:01,500 out what this even is. Yeah. And I mean, like he was he was 325 00:17:01,500 --> 00:17:04,170 asking, like fundamental questions like, how do these 326 00:17:04,170 --> 00:17:06,840 work? Yeah. Very weird question to be asking when you're 327 00:17:06,840 --> 00:17:10,410 proposing a ban. Yeah. Right. Like, he's probably Yeah, but 328 00:17:10,410 --> 00:17:12,720 you know what I mean, like, I know, yeah, you should know, you 329 00:17:12,720 --> 00:17:15,270 should probably know it inside and out. Yeah. By the time 330 00:17:15,270 --> 00:17:17,400 you're already you should be like, I know everything there is 331 00:17:17,400 --> 00:17:20,820 to know. Now we need to ban it. Right. It's weird to say, let's 332 00:17:20,820 --> 00:17:23,850 ban it. How did this work? Yeah, it seemed that was the that was 333 00:17:23,851 --> 00:17:24,870 my personal take away. 334 00:17:24,809 --> 00:17:27,269 Johny Fernandez: Yeah. So let me ask you this, Sean. Do you think 335 00:17:27,269 --> 00:17:29,729 that obviously, we've seen New York do something very similar 336 00:17:29,729 --> 00:17:32,279 to this Wi Fi? we're now seeing Maryland do something similar 337 00:17:32,279 --> 00:17:34,739 o this? What about other state ? Do you think this will be 338 00:17:34,739 --> 00:17:37,379 a pattern with other states that they will also start 339 00:17:37,529 --> 00:17:41,249 implementing something like this? But then we can also see 340 00:17:41,249 --> 00:17:46,079 that some other states will maybe welcome MCA is, you know, 341 00:17:46,109 --> 00:17:49,019 the MCA Business. So what a e your thoughts? Do you think this 342 00:17:49,019 --> 00:17:51,719 will continue to be a trend across? You know, the Northeast? 343 00:17:52,589 --> 00:17:57,299 Out West? 344 00:17:53,750 --> 00:17:57,140 Sean Murray: Yeah, well, these type of proposals, they don't 345 00:17:57,140 --> 00:18:02,390 come from nowhere. They usually come from an advocacy group who, 346 00:18:03,260 --> 00:18:08,420 you know, embarks on a long mission to complete some type of 347 00:18:08,450 --> 00:18:12,950 objective. The fact that this bill ended up in Maryland, 348 00:18:13,310 --> 00:18:15,740 wasn't just because people in Maryland were sitting there 349 00:18:15,890 --> 00:18:19,910 being like, oh, you know, we've read in the news in New York, we 350 00:18:19,910 --> 00:18:23,540 want to do it too, right? Somebody proposed it to them, 351 00:18:23,900 --> 00:18:26,270 and show them what was done in New York and show them what was 352 00:18:26,270 --> 00:18:29,690 done in California and saying, you too, should also adopt it. 353 00:18:29,990 --> 00:18:34,130 And here's how they did it. Right. So which whoever the 354 00:18:34,130 --> 00:18:38,720 group is behind all this, right? It's my belief that they will 355 00:18:38,720 --> 00:18:43,940 continue to push for these type of changes in other states. Now, 356 00:18:43,940 --> 00:18:47,540 whether or not the states will be as open to it as California 357 00:18:47,630 --> 00:18:51,350 and New York, which are very progressive, is yet to be seen. 358 00:18:51,800 --> 00:18:56,180 I highly doubt we'll end up in a situation where all 50 would do 359 00:18:56,180 --> 00:19:00,110 it. Yeah. Especially since we're dealing with commercial 360 00:19:00,110 --> 00:19:03,380 transactions. That's the craziest part about all this is 361 00:19:03,380 --> 00:19:06,470 that these aren't really consumer protections, right? 362 00:19:06,500 --> 00:19:12,140 these are, these are commercial financing regulations. And I 363 00:19:12,140 --> 00:19:15,890 would be shocked if this was, you know, widely adopted, like 364 00:19:15,890 --> 00:19:20,300 try attempts to ban or whatever whatever it is, in even even 365 00:19:20,330 --> 00:19:24,470 having a mandatory APR disclosure. And I don't really 366 00:19:24,470 --> 00:19:29,570 know ultimately, what you know what that will accomplish? 367 00:19:29,630 --> 00:19:36,110 Right? From what I've heard that disclosing an APR on a loan, you 368 00:19:36,110 --> 00:19:43,730 know, forget about MCAs for a second doesn't necessarily allow 369 00:19:43,850 --> 00:19:48,500 doesn't really make people change their minds. Yeah. Right. 370 00:19:48,500 --> 00:19:52,490 And so they might be informed about the number. But if you're 371 00:19:52,520 --> 00:19:55,940 still doing the same thing after that, you know, it's kind of 372 00:19:55,940 --> 00:19:57,140 like well, what really happened? 373 00:19:57,170 --> 00:19:57,410 Johny Fernandez: Yeah, 374 00:19:57,650 --> 00:19:57,980 Sean Murray: Right 375 00:19:57,990 --> 00:20:02,490 Johny Fernandez: Yeah. Yeah. That's very much true. So that's 376 00:20:02,490 --> 00:20:03,210 interesting. 377 00:20:03,690 --> 00:20:06,120 Sean Murray: You were asking like when the states become 378 00:20:06,120 --> 00:20:10,980 friendly, or something like that? Well, you know, the states 379 00:20:10,980 --> 00:20:15,090 like Florida, which is technically been a debtor 380 00:20:15,330 --> 00:20:18,510 friendly state more than a creditor friendly state, that is 381 00:20:18,510 --> 00:20:19,800 where you just were just in Florida. 382 00:20:19,800 --> 00:20:22,380 Johny Fernandez: Yeah I was in Florida. It is something I spoke 383 00:20:22,380 --> 00:20:25,170 with the mayor about. So that question was asked. 384 00:20:25,380 --> 00:20:28,080 Sean Murray: Yeah, so they're, they're not normally known as a 385 00:20:28,080 --> 00:20:33,270 creditor friendly state. But they are from what I'm get parts 386 00:20:33,270 --> 00:20:39,180 of it are FinTech open minded. Yeah. All right. And I think 387 00:20:39,210 --> 00:20:44,850 that involves all types of financial innovation. And so 388 00:20:45,780 --> 00:20:48,330 what I'm what I'm hearing is that there is an interest level 389 00:20:48,330 --> 00:20:52,410 in relocating from states, like New York, to states like Florida 390 00:20:52,440 --> 00:20:55,590 in order to continuing to conduct your business. 391 00:20:56,110 --> 00:20:57,880 Johny Fernandez: That's interesting. Do you think that 392 00:20:58,330 --> 00:21:02,320 these type of decisions that are being made will start driving 393 00:21:02,770 --> 00:21:06,550 will pretty much be the reason why MCA is dead in New York or 394 00:21:06,550 --> 00:21:07,720 in Maryland? 395 00:21:08,470 --> 00:21:09,970 Sean Murray: These type of decisions? What do you mean? 396 00:21:10,110 --> 00:21:12,630 Johny Fernandez: Like these type of bills that are being 397 00:21:12,630 --> 00:21:17,250 proposed, the fact that they're being brought to light and that, 398 00:21:17,280 --> 00:21:20,940 you know, there's people like the advocacy groups or like 399 00:21:20,940 --> 00:21:27,270 leaders that want to pretty much push MCA, MCA owners out? Will 400 00:21:27,300 --> 00:21:29,190 like, kill the business here in New York? 401 00:21:30,000 --> 00:21:31,770 Sean Murray: Well, that's a, that's a really good question. 402 00:21:32,130 --> 00:21:37,620 And that is to be seen. My understanding is that the New 403 00:21:37,620 --> 00:21:40,950 York disclosure bill goes into effect at the end of June, there 404 00:21:40,950 --> 00:21:47,970 was originally speculation that it was going to be delayed until 405 00:21:48,000 --> 00:21:52,170 about January, January 2022. And now it looks like the original 406 00:21:52,170 --> 00:21:56,190 date is, you know, set in stone, and we're looking at June, for 407 00:21:56,190 --> 00:21:59,700 one is going to be implemented. What's strange about the law is 408 00:21:59,700 --> 00:22:02,850 that it talks about transacting business in New York, it doesn't 409 00:22:02,850 --> 00:22:05,220 necessarily, and I'm not a lawyer, maybe, you know, maybe 410 00:22:05,220 --> 00:22:07,770 the lawyers gonna get mad at me for talking about it. But, you 411 00:22:07,770 --> 00:22:10,080 know, this is my layman's person of it. It talks about 412 00:22:10,080 --> 00:22:14,460 transacting business in the state of New York. It makes me 413 00:22:14,460 --> 00:22:17,460 wonder if if I was in New York, and I decided not to work with 414 00:22:17,460 --> 00:22:19,920 New York customers in this transaction still happening 415 00:22:19,920 --> 00:22:23,370 here. You know what I mean? So and so maybe it's safer, to, to 416 00:22:23,370 --> 00:22:25,950 not operate in the state out of an abundance of caution, 417 00:22:25,960 --> 00:22:29,200 Johny Fernandez: but was unclear and this is something that, 418 00:22:29,470 --> 00:22:33,130 again, we're not lawyers, so we definitely need to specify with, 419 00:22:33,160 --> 00:22:37,480 you know, someone from the office or a lawyer, but when I 420 00:22:37,480 --> 00:22:40,900 met when I met transaction doing a transaction in New York wasn't 421 00:22:40,900 --> 00:22:44,320 the big debate that we discussed, was if it touches New 422 00:22:44,320 --> 00:22:47,170 York, like technically like, alright, like doing a 423 00:22:47,170 --> 00:22:50,290 transaction? Is it working one on one with someone? Or if 424 00:22:50,650 --> 00:22:54,100 there's some type of connection to New York? Does that count as 425 00:22:55,240 --> 00:22:57,970 doing as you know, transacting in New York? 426 00:22:58,170 --> 00:23:00,840 Sean Murray: Well, these are the things that certain litigators 427 00:23:00,840 --> 00:23:03,360 I'm sure are licking their, you know, licking their fingers and 428 00:23:03,360 --> 00:23:08,610 lips for you know, getting ready to argue, yeah. I think it it's 429 00:23:08,610 --> 00:23:11,160 important, though, that we talk about it. And we mentioned it, 430 00:23:11,160 --> 00:23:14,730 even if lawyers like, you know, like, you know, because if 431 00:23:14,730 --> 00:23:18,840 you're continuing to conduct business in New York, and you're 432 00:23:18,840 --> 00:23:23,160 not fully versed, or fully briefed by your own legal 433 00:23:23,160 --> 00:23:27,060 counsel on how to proceed with this new law in place, you could 434 00:23:27,060 --> 00:23:29,670 run into trouble, right? People are like, oh, it's some 435 00:23:29,670 --> 00:23:32,430 disclosures. Right. So you gotta add a box, you got to add, put a 436 00:23:32,430 --> 00:23:36,330 number and then just disclose, disclose. It's a little bit more 437 00:23:36,330 --> 00:23:40,380 than that. Yeah. It's, uh, and I think people should at least 438 00:23:40,380 --> 00:23:43,860 take away from this conversation that I better have a lawyer. 439 00:23:43,890 --> 00:23:47,610 Yeah, read this and tell me if I should still be doing business 440 00:23:47,820 --> 00:23:50,280 in any way. In the state of New York. Yeah. 441 00:23:51,000 --> 00:23:53,820 Johny Fernandez: And I think we were also when we talked about 442 00:23:53,820 --> 00:23:57,180 and we've the stories on it, the fact that there's so much open 443 00:23:57,180 --> 00:24:02,250 ended questions in that, you know, just that entire thing. 444 00:24:02,640 --> 00:24:06,810 Because there's questions that are left unanswered, and they 445 00:24:06,810 --> 00:24:10,740 just kind of draft it together, it changed. And they kind of 446 00:24:10,740 --> 00:24:15,450 just kept it hush hush, and, you know, kept pretty much everyone 447 00:24:15,510 --> 00:24:17,850 up in the air, because there's a lot of questions that no one has 448 00:24:17,850 --> 00:24:18,450 the answers to. 449 00:24:18,510 --> 00:24:20,460 Sean Murray: That's right. We didn't like we were just saying, 450 00:24:20,520 --> 00:24:23,310 we still only have the answers. It's like, Yeah, all we can tell 451 00:24:23,310 --> 00:24:26,820 you to do is you should probably go yeah, contact a lawyer and 452 00:24:26,820 --> 00:24:29,460 tell tell you what to do. That's the best thing to do. You know, 453 00:24:29,460 --> 00:24:32,280 as a layman, I can form my own kind of opinions about what it 454 00:24:32,280 --> 00:24:34,620 means. But yeah, there's a lot of things in there. I don't even 455 00:24:34,650 --> 00:24:37,740 I have no clue. I don't really don't know what it means. And, 456 00:24:37,740 --> 00:24:40,320 uh, you know, but I'm not a funding company. We're not we're 457 00:24:40,320 --> 00:24:42,870 not funders. But if you are out there, if you're a broker, and 458 00:24:42,870 --> 00:24:46,080 if you're a funder, if you're a lead generator, you really need 459 00:24:46,080 --> 00:24:49,980 to work with counsel about compliance with this law. What 460 00:24:49,980 --> 00:24:51,930 is it you need to do, maybe everything is going to be fine, 461 00:24:52,110 --> 00:24:54,480 but you need someone to tell you it's going to going to be okay, 462 00:24:54,510 --> 00:24:55,770 or what you should be doing. 463 00:24:57,370 --> 00:25:00,760 Johny Fernandez: Awesome, great advice. So i think that wraps it 464 00:25:00,760 --> 00:25:04,660 up for us now. Big Day today's Bachelor Monday. 465 00:25:05,110 --> 00:25:06,220 Sean Murray: Bachelor Monday. 466 00:25:06,280 --> 00:25:07,870 Johny Fernandez: Yeah, we're excited for that. I know 467 00:25:07,870 --> 00:25:10,960 everyone's been talking about that little snippet from a 468 00:25:10,960 --> 00:25:14,440 couple weeks ago. So I'm excited to see what happens tonight. 469 00:25:14,680 --> 00:25:15,940 Sean Murray: Is it hometown's finally? 470 00:25:16,060 --> 00:25:18,280 Johny Fernandez: Not yet, we're getting. We're getting there. 471 00:25:19,900 --> 00:25:21,730 Sean Murray: Next, the next bachelor brief will be after 472 00:25:22,330 --> 00:25:22,750 hometown 473 00:25:23,080 --> 00:25:25,570 Johny Fernandez: No, it is. Oh, it is hometown. I'm sorry. Yes. 474 00:25:25,570 --> 00:25:25,960 Okay. 475 00:25:26,000 --> 00:25:27,950 Sean Murray: Yeah, it's all coming up next. 476 00:25:29,450 --> 00:25:31,640 Johny Fernandez: It is. I'm tired. I forgot about that. It 477 00:25:31,640 --> 00:25:32,120 was it was 478 00:25:32,240 --> 00:25:34,700 Sean Murray: I need to get my bachelor bracket. I actually got 479 00:25:34,700 --> 00:25:37,610 a text right before we went live that I have reminders set my 480 00:25:37,610 --> 00:25:38,390 bachelor bracket. 481 00:25:38,420 --> 00:25:40,100 Johny Fernandez: That's awesome. Well, you have a couple more 482 00:25:40,100 --> 00:25:41,210 hours before the show, sir. 483 00:25:41,240 --> 00:25:42,410 Sean Murray: Yeah, but I don't want to wait till the last 484 00:25:42,410 --> 00:25:44,480 minute. And everyone's trying to set their lineup you know, right 485 00:25:44,480 --> 00:25:48,980 before. This is the fantasy sports that I do. 486 00:25:51,680 --> 00:25:54,110 Johny Fernandez: Well, we'll see you guys next time. I can't wait 487 00:25:54,110 --> 00:25:57,950 to chat with you guys again. And if anyone has any comments, 488 00:25:57,950 --> 00:26:00,920 questions, possible, write to us reach out to us 489 00:26:00,950 --> 00:26:05,480 Sean Murray: Email, email, LinkedIn, Facebook, Instagram, 490 00:26:06,020 --> 00:26:06,920 comment away, 491 00:26:06,950 --> 00:26:07,490 Johny Fernandez: Twitter, 492 00:26:07,700 --> 00:26:08,780 Sean Murray: Twitter, whatever you want, 493 00:26:08,760 --> 00:26:10,995 Johny Fernandez: Whatever you want. Definitely let us know. 494 00:26:11,048 --> 00:26:14,295 engage with us because we're always looking for feedback. And 495 00:26:14,349 --> 00:26:17,809 if anyone has any questions, any tips definitely reach out to us. 496 00:26:17,862 --> 00:26:20,790 So awesome. Again, Johny Fernandez, here with deBanked. 497 00:26:20,780 --> 00:26:22,020 Sean Murray: Sean Murray with deBanked 498 00:26:22,010 --> 00:26:23,120 Johny Fernandez: See you guys next time.