Johny Fernandez: You know what I am surprised about though. I am
surprised about this of Virginia hopping on the bandwagon of
commercial finance EPR disclosures?
Sean Murray: Yes, that's right.
Johny Fernandez: That's what I'm shocked about. Because it's
coming. What I'm starting to see, we've talked about this
last year. And now that it seems like certain states are starting
to like, really, what's your smile? I don't know. What's the
word? I'm sorry. He's just smiling at me.
Sean Murray: I don't know. Yeah, I don't know. Yeah, no, but I'm
still I still can't get over whether I want to find out. When
I give my two cents on this bill. I want to find out if you
were, if you're shocked
Johny Fernandez: That you are. I'm not surprised that you were
shocked okay. But on a serious note, Virginia's pretty much
gonna piggy you. It's joining the bandwagon of what New York
is doing? Yeah, we're you shocked?
Sean Murray: Was I shocked. So I don't know that I would if I was
necessarily shocked yet, because the bill is in such early stages
that from what I understand, it only has one sponsor. Okay, so
the bill is going to have a lot of legs to it. From the very
beginning, you usually have several sponsors who are all
like, yes, I want my name attached to it from the
beginning. So that, you know, it becomes my bill and your bill
going around. And you know, and say that this was our signature.
You know, this is our one of our signature achievements of this
future ones. Yeah, I've only seen one sponsor attached to the
bill. I don't even think it's even gone into any committees
yet. So we're talking about super early stages. But the
reason we reported on it is because it's good to know that
these things are in the works from the very beginning, because
as we saw in New York, even though we reported on its
progress along the way, people people were still shocked when
it actually passed. In fact, when we reported that it passed,
and these were the ramifications some people told us, we must be
lying cause they had not heard anything about it, even though
we've talked about it for months. So, you know, what else
can we do? Other than bring it to people's attention? That's
all we do. We report the news. A member of the Virginia's state
legislature did introduce a bill on commercial financing, APR
disclosure. It's not as comprehensive as the New York
one. It's like, it's like a trimmed down stripped down
version. Yeah, that focuses entirely on sales based
financing, otherwise known as revenue based financing, or as
some people call it merchant cash advance. So it's targeting
one very specific thing.
Johny Fernandez: So we want to get even more specific. It's
Virginia, Virginia House Bill 1027. And it's aimed squarely at
sales based financing provided.
Sean Murray: Yeah, so that's the term of use sales based
financing. That's been the key word in a lot of the in a lot of
the state proposals, sales based financing. They're basically
saying, if you're taking a if you're looking at someone's
revenue, and you're buying buying some of their future
sales, or taking a percentage of your future revenue, as
repayment that this counts as sales based financing, that's
aimed very specifically at one area of the finance market. And
that's where that's where at least one Virginia state
legislator has, you know, put their attention on, we'll see
what happens to it could be nothing. But I don't want to not
tell people, if we know it's in the works, because the earlier
you know about something, the better. So we don't end up with
a New York situation where the bill passes. Everyone says that
can't be I've never heard of it. So that's, that's what's going
on in Virginia.
Johny Fernandez: Yeah. And speaking of New York, I know,
it's one of those things that even the New York regulators,
they also saw that, like the, the, you know, what they've
introduced is, is still weak. I mean, it's not one of those
things that, you know, they have everything figured out, the
language is great. There's still a lot of questions regarding
that, and, and how it's going to affect the business. And like,
you know, I think the one thing that keeps coming to mind,
right, when I think about the New York bill is like, if you
live in Florida, and there's a transaction in New York and your
deal touches New York, do you still technically get impacted
even if like, you know, it's like things like that like? And
then the other thing, were the comments, you know, in New York,
like, again, the bill has passed, but it's still
technically weak, because there's still a lot of
questions. And I think that's what's interesting about the
Virginia law, even though it's still fairly new,
Sean Murray: It's just a bill. It's just a it's just an idea.
Johny Fernandez: It's an idea that they are probably looking
at Maryland, they're probably going to New York and kind of
seeing how that's resulted. And clearly that hasn't resulted in
the best for the for them, because a lot, there's still a
lot of questions for everything.
Sean Murray: Yeah, you bring up a really good point, because
here you have Virginia copying and pasting huge segments of the
New York, of the New York law. I'm like, we'll do that too. But
New York would have benefited from a lot of earlier
correspondence with people who it was going to affect because
what are they have, as you just said, it's weak and people have
all these questions, weak in the terms of nobody knows how you
know who it applies to is just our theres a lot of questions.
It's too ambiguous. And so what did New York regulators do? They
actually said, Oh, I know we'll just call another state that
implemented something similar. So they call the regulators in
California, who passed their own disclosure bill like four years
ago. And they said, Well, what did you guys do? And they said,
We didn't know what to do. We couldn't fix this thing. We've
been working on it for four years, New York is like, you got
to be kidding me. Right? Four years, you had you had had this
on your desk, you wouldn't able to figure it out. We're stuck
with implementing this, like in a week from now. Never gonna
happen. So they delayed the bill, then then you have
Virginia saying, oh, we'll, copy New York, but New York doesn't
know what to do. California didn't know what to do. And
nobody knows what to do. But everyone's creating bills to do
oh, we need to disclose. But it seems like people would these
states, not saying that their initiatives are bad or acting in
bad faith, but they it seems like they would certainly
benefit from communicating with the party that's going to impact
from the very beginning, before they passed the law. Because we
as we're seeing so far the law gets passed, and then everyone
say, Oh, this isn't gonna work.
Johny Fernandez: Yeah, no, it's true. I think one of the things
that was very, very interesting was that, you know, for one of
these meetings that you know, they have, they were asking, you
know, the leaders, you know, the state leaders, and a lot of the
state leaders are like, confused themselves, like, what does this
mean? Or like, what is the verbiage of this are just,
they're just trying to understand the gauge of the
entire industry, and they don't even know. And it's like,
there's a lot of unknowns, it's across the board,
Sean Murray: You can't pass it can't pass the law and not know
anything. Not understanding it, it's, you really need to
understand, talk to the relevant people, you will find if you're
out there and your a regulator and your watching, you will find
that so many people involved in this industry, are very
interested in passing some sort of regulation to address the
issues that you are, are concerned with. Yeah. Which is
great news, because they're not combative. They're not opposed
to something, right. But it seems like from what we've
gathered, it would it would, it would serve everyone's interests
better if there was communication a lot more early
in the process, so that we don't end up with situations where
there are laws passed, and then no one knows what to do.
Johny Fernandez: And I think the other thing that's interesting
is that the communication not only has to be within the area
of state leaders, but also to the constituents that, you know,
want to chime in or like, like in New York, it's like, hey,
let's open up the comments area. And then everyone's like, oh, we
didn't even know, like, we even know that was happening. We
didn't know where to go. And we didn't know there was a
deadline, the deadline passed. So it's like, at the end of the
day, it's just a big clustered mess,
Sean Murray: Isn't it? It's so weird. That's their hey, let's
open it up to comments after the law is passed. And like, oh,
like ah, and you've done this before the law was passed. Now
the law has already passed. And then like they take comments.
Hey, what do you guys think of this? Oh, it's not gonna work.
Oh, it's already the law.
Johny Fernandez: So it's interesting. I'm definitely
gonna be interested in I say this all the time about what's
gonna be happening in Virginia because I want to see how this
is going to evolve.
Sean Murray: Yeah, and I we will keep everyone updated as to
whether or not one of us is shocked by the developments,
Johny Fernandez: You know, maybe I'm not gonna be shocked. Are
you gonna be shocked? We'll find out find out in
Sean Murray: Tune in tune in for my reaction. And Johnny's
analysis of it