Sean Murray: I got two questions afterwards, because I mentioned
I wasn't really even in passing. I said it pretty directly that
if you charge more than 25 percentage annualized interest
in New York State, you've committed a criminal act. That's
what the New York State statute says, and a few people were
like, well, wait. A lot of these online lenders that we work with
are clearly charging more than 25% to businesses in New York.
Are you saying they're committing a crime? And I was
like, well, well, no, I'm not. I wasn't.
Johny Fernandez: We did emphasize we're not lawyers.
This is not legal advice. This is we.
Sean Murray: Well, yeah. Well, yes. But I know the answer to
it.
Johny Fernandez: Yeah.
Sean Murray: So it wasn't like, oh, I'm not lawyers. Don't
listen to me. No, what I told you is true. Yeah. What I told
you was true. And the reason there are online lenders, and
lots of lenders who lend to New York businesses above 25%, they
lend to consumers above 25%. How does this work? How if it's a
crime in New York, how do they do it? Well, it's because if
you're a national, a state chartered bank, you are exempt
from the New York State rule. So New York had this rule, it says
you can't do it. But if you're a bank, state chartered like Utah,
or Virginia or something or a nationally chartered bank, you
don't have to abide by those rules. Yeah. And some of the
online lenders that people are familiar with, you might be
thinking, wait, but they're not a bank. Well, that feeds into
the whole bank partnership thing that we hear about and
partnering with banks. And you wonder why a bank is making the
loan? Well, it's because banks are exempt from that rule. Banks
can lend in whatever APR they want. They don't they're not
they're not they don't have to abide by New York State's
criminal usury cap, it doesn't apply to them. Now, does this
make New York State very happy? I don't, I don't think so. But
it's, but it's kind of been the standard for a long time, you
can get a credit card in New York State that charges you more
than 25% interest, because the bank is the one behind the card.
And they're not. They don't have to abide by these rules. So if
anyone's wondering, hey, how how did this make any sense? Online
lenders or banks, online lenders who are partnered with banks, or
banks, are exempt from that rule. So that's what that was
all about. And I hope people understand that too. Because if
there's someone out there saying, they're a lender, and
they're lending to businesses in New York, you need to start to
think about how they do it. Because if they're charging a
certain rate of interest, they could be they could be getting
into dangerous, hairy, dangerous territory. So always ask that
question. Someone is saying we're lending if you're a broker
someone's saying their lender, start to ask them questions
about how they can legally lend in states like New York, other
states have similar laws, but I think New York is a popular,
we're here in New York. Yeah. Right. And a lot of a lot of
brokers and lenders and funders are based in New York, a lot of
businesses are in New York. So these are the questions you need
to ask if you're a lender in in New York, ask them, how do you
do it legally?