Regulation

SEC Finding Said that Prosper Misled Investors

April 22, 2019
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From approximately July 2015 until May 2017, Prosper excluded certain non-performing loans from its calculation of annualized net returns that it reported to its investors, according to an SEC order released last Friday. The order found that Prosper reported overstated annualized net returns to more than 30,000 investors on individual account pages on Prosper’s website […]

Lots of Tech Buzzwords, Scary Problems

April 16, 2019
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advanced machine-learning, algorithms, big data, streamlined, technology, consumer-friendly A federal regulator cut through the shield of fintech buzzwords on Monday when it announced that a darling of online lending valued at $2 billion, failed to properly handle rudimentary loan practices. The lender is Chicago-based Avant, who reportedly settled with the FTC for $3.85 million. According […]

New Jersey Bill Seeks to Eliminate Quick Easy Access to Small Business Loans

March 21, 2019
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The speed at which a small business owner can access capital to grow and create jobs in New Jersey is too dangerous and must be stopped. This is the takeaway from a bill (S3617) proposed by New Jersey State Senator Nellie Pou that calls for a minimum 3-day waiting period between when contract terms are […]

New York Legislators Introduce Small Business Usury Bill

February 20, 2019
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Two members of the New York State legislature have introduced a bill to apply consumer usury protections to small businesses. Bill A03638, introduced by New York Assemblymembers Yuh-Line Niou and Crystal Peoples-Stokes define a small business as “one which is resident in this state, independently owned and operated, not dominant in its field and employs […]

New Jersey MCA & Business Loan Disclosure Bill Update (S2262)

February 6, 2019
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new jersey

Bill S2262 in the New Jersey State Senate mandating disclosures on MCA and business loan contracts, was amended last week. In its current form, the bill, if it became law, would require MCA providers to disclose: the total dollar costs to be charged to a small business concern, assuming the small business concern delivers all […]

New York Introduces Bill to Ban COJs in Financial Contracts

February 4, 2019
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New York Assembly

New York Assemblymembers Yuh-Line Niou and Crystal Peoples-Stokes have introduced a bill that would prohibit Confessions of Judgment (COJs) from being used in any contract or agreement for a financial product or service. Peoples-Stokes’ district was one of the first districts to boycott COJs originated by merchant cash advance companies after Erie County Clerk Michael […]

Get The Affidavit or Waive It? Examining Confessions of Judgment

February 1, 2019
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cojs

This story appeared in deBanked’s Jan/Feb 2019 magazine issue. To receive copies in print, SUBSCRIBE FREE Caton Hanson, the chief legal officer and co-founder of the online credit-reporting and business-to-business matchmaker Nav, says that his Salt Lake City-based company would not associate with a small-business financier that included “confessions of judgment” in its credit contracts. […]

How an SBA Lender is Managing Through the Shutdown

January 10, 2019
Article by:

Everett Sands

Everett Sands, CEO, Lendistry As a result of the U.S. government shutdown that started on December 22 of last year, hundreds of thousands of government employees have been working without pay. The shutdown has also temporarily stopped the Small Business Administration (SBA), a government agency, from operating. This means that obtaining an SBA loan, which […]

Less Than Perfect — New State Regulations

December 21, 2018
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rules and regulations

This story appeared in deBanked’s Nov/Dec 2018 magazine issue. To receive copies in print, SUBSCRIBE FREE You could call California’s new disclosure law the “Son-in-Law Act.” It’s not what you’d hoped for—but it’ll have to do. That’s pretty much the reaction of many in the alternative lending community to the recently enacted legislation, known as […]

Senate Bill Introduced to Ban Confession of Judgments Nationwide

December 6, 2018
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Senator Marco Rubio

Senators Sherrod Brown and Marco Rubio have called for a nationwide ban on Confessions of Judgment in response to the Bloomberg Businessweek series published last month. The bill, which would amend the Truth in Lending Act, may be named the Small Business Lending Fairness Act. You can download the bill here Though Businessweek has been […]

Who Are the New York City Marshals?

November 28, 2018
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NYC

In 2017, New York City Marshal Ruth Burko earned less in poundage than she owed the city in annual fees. At 91-years old, Burko’s tenure as a city licensed judgment enforcer has finally come to an end. She technically announced her retirement at the end of 2016 but her long career began when Mayor John […]

ELFA Reacts to New Jersey Small Business Loan Bill

October 31, 2018
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New Jersey Capitol Building in Trenton

The Equipment Leasing Financing Association (ELFA) had its 57th Annual Convention in Phoenix in the middle of October. During the convention, ELFA’s Vice President of State Government Relations Scott Riehl left abruptly to get to Trenton, New Jersey. Why the rush? He had been alerted that there was a hearing on a small business lending […]

Regulators Say ‘Sandboxes’ Work

October 22, 2018
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Emergence of RegTech at Money2020

From left to right: JoAnn Barefoot, Hummingbird Regtech, Barefoot Innovation Group | Nick Cook, Financial Conduct Authority (UK) | Christopher Sidler, Promontory | Patrick Pinschmidt, Middlegame Ventures | Alex Raydin, PerformLine At the regulatory technology (or RegTech) sessions at Money 20/20 yesterday, toy shovels seemed glaringly absent given the number of times the word “sandbox” […]

How Regulators Like to Be Approached

October 22, 2018
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The Regulatory Environment

From left to right: Duane Pozza, FTC | Chris Camacho, Greater Phoenix Economic Council | Paul Watkins, BCFB | Melissa Koide, FinRegLab | Manny Alvarez (moderator), Affirm On the first day of Money 20/20 yesterday, a panel of current and former regulators discussed how the regulatory environment can help emerging fintech companies and how the […]

NJ Legislature Aims to Classify Merchant Cash Advance as a Loan in New Disclosure Bill

October 15, 2018
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New Jersey Capitol Building in Trenton

S2262 in New Jersey, a bill to require disclosures in small business lending, was amended this afternoon to define merchant cash advances as small business loans for the purposes of disclosure. Banks and equipment leasing companies are exempt from the bill. You can listen to the hearing here. Debate on S2262 begins at the 6 […]

New Jersey Moves to Regulate Small Business Loan Disclosures and Brokers

October 15, 2018
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New Jersey Capitol Building in Trenton

A committee within the New Jersey State Senate convened today at 1:30pm to discuss S2262, a new small business loan disclosure bill. Similar to SB1235 in California, this bill would require all of the following on small business loan contracts less than $100,000: The APR (This was removed during the committee hearing) The annualized interest […]

California Now Requires Mandatory Disclosures on Commercial Finance

October 1, 2018
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Senator Steve Glazer California

California Governor Jerry Brown has signed SB 1235. As of Jan 1, 2019, commercial finance companies in California will be required to disclose the following on their contracts: (1) The total amount of funds provided. (2) The total dollar cost of the financing. (3) The term or estimated term. (4) The method, frequency, and amount […]

Renaud Laplanche Barred From the Securities Industry

September 28, 2018
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LendIt USA 2016

Renaud Laplanche, 1 month before he resigned from LendingClub at the LendIt USA 2016 conference in San Francisco, California, USA on April 11, 2016. (photo by Gabe Palacio) The SEC announced today that it charged LendingClub Asset Management, formerly known as LendingClub Advisors LLC (LCA), and its former president and co-founder Renaud Laplanche, with fraud […]

Congressman Cleaver’s Findings on Fintech Lending Mixed

August 30, 2018
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cleaver principles

Congressman Emanuel Cleaver, II from Missouri announced findings earlier this month from a year-long inquiry he initiated into fintech small business lending practices and minorities. His initial inquiry was to determine if merchant cash advance companies had mechanisms in place to avoid discriminatory lending practices.   Cleaver concluded that some common practices in non-bank underwriting […]

The California Business Loan & MCA Disclosure Bill Has Passed

August 30, 2018
Article by:

Steve Glazer

The bill has passed. With the governor’s signature, all business loan contracts and merchant cash advance contracts in California will soon require a uniform set of formal disclosures including an annualized rate of the total cost. The precise formula for that rate will be determined by the state’s regulatory agency, the Department of Business Oversight. […]