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  1. #1
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    FTC to end MCA?

    https://debanked.com/2020/08/ftc-com...cash-advances/

    Seems like they're fully intent on shutting down MCA.

  2. #2
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    I told u all this months prior....

  3. #3
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    so this will force companies to partner with a federally chartered bank and structure their product as an actual loan pushing out many that would or want to do that setup. banks win as they collect large fees to setup these pass thru's, that is, until they begin to investigate those banks and how they are providing a rent a bank model for MCA's. than they will have to cast a stone on the banking industry as well or turn an eye (web bank, celtic bank, finwise bank, bank of the internet, etc) could these banks be lobbying to end MCA and push for these setups?

  4. #4
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    Quote Originally Posted by SFC View Post
    https://debanked.com/2020/08/ftc-com...cash-advances/

    Seems like they're fully intent on shutting down MCA.
    What may cease is companies that stack, 2,3,4,5,6,7,8,9th positions !!
    Dave Lambert, Business Development
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  5. #5
    Quote Originally Posted by SFC View Post
    https://debanked.com/2020/08/ftc-com...cash-advances/

    Seems like they're fully intent on shutting down MCA.
    An unelected bureaucrat makes a public statement admonishing abusive practices in the industry and all of a sudden everybody becomes chicken little. No, the FTC is not shutting down the MCA industry, nor can they. They are going to make examples of certain players by pursuing the most egregious of violations (i.e., Par, Yellowstone, etc) to curb these abuses and set clear guidelines as to what's unacceptable. You can't call a transaction an MCA and then behave as if it's a loan. That's never been okay, and regulators are finally putting a stop to it. But that won't end the MCA as a product or industry. It will simply exterminate those who can't otherwise adapt.

  6. #6
    Member Reputation points: 23 B2csp's Avatar
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    Quote Originally Posted by SFC View Post
    https://debanked.com/2020/08/ftc-com...cash-advances/

    Seems like they're fully intent on shutting down MCA.
    They cant shut down the industry, his opinion is subjective to the examination of but a few advances given by what we consider even in our industry to be "high risk" funders. MCA operates in a world outside of the banking realm which they might be accustom to, therefore the FTC can make their statements based on their opinion but as long as we do not enter into the "loan" space or use language that suggest we are providing a loan and not a purchase of future receivables then these statements are no threat to the industry. As mentioned by someone else above they might only be able to attack companies providing additional positions when the merchant is clearly overleveraged thereby putting them at risk of bankruptcy, but if the contract is clear in its wording then the merchant made a conscious decision of taking more capital against his future receivables and there's nothing to penalize.

    (as a disclaimer, I am no attorney; just stating my opinion)

  7. #7
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by SFC View Post
    https://debanked.com/2020/08/ftc-com...cash-advances/

    Seems like they're fully intent on shutting down MCA.
    Blah, blah....all these new regulations are going to do is bring Cash Advance back to a receivables product. You want to do daily ACH? fine...he payments can fluctuate according to sales volume.....and NOT be considered a default.

    Yeah, these 3rd, 4th. 5th. etc positions are going to be way tougher, but then again....when did a 5th position 20 day 1.49 offer ever help a merchant? Help a merchant do what?

    So all of you folks out there who lived and died by the stack position, yeah, you have reason to be concerned....you will be pushed out.

    BTW, several of the bigger companies out there (yes, YSC-FUNDRY included) are already taking steps to remedy this process and adhere to the true receivables guidelines.

    So I guess you cats better catch up on your CC processing guidelines and material, because it looks like we are headed back that way.
    Last edited by Chambo; 08-04-2020 at 11:23 AM.

  8. #8
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    Quote Originally Posted by golf2014 View Post
    I told u all this months prior....
    months? more like years.When was it that you left the mca world even though you stay on this site? Do not confuse taking the trash out with ending an industry

  9. #9
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Bottom line here is companies will have to follow rules. If you follow the rules you will be fine. For too long companies have done what they wanted, how they wanted and had little regard for the few rules this industry does have. Now those companies are paying the price
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  10. #10
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    People see these headlines so often that they think this isnt a big deal, and its not a big deal TODAY. But its coming. This industry is heading for more regulations and it gets closer and closer everyday. Those who are in denial and dont prepare will be left holding an empty bag and scrambling to figure it out.

  11. #11
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    Quote Originally Posted by MCN View Post
    People see these headlines so often that they think this isnt a big deal, and its not a big deal TODAY. But its coming. This industry is heading for more regulations and it gets closer and closer everyday. Those who are in denial and dont prepare will be left holding an empty bag and scrambling to figure it out.
    ok ill bite. What can be done to prepare?

  12. #12
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    It depends on your role in the industry. I dont claim to be an expert on this and i dont know all that can be done to prepare, but at the bare minmum id say as a broker you should be trying to incorporate some other products (LOC's, SBA loans, invoice factoring, equipment financing etc etc) particularly if your model relies on high risk, short term, multiple position deals.

  13. #13
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    Quote Originally Posted by MCN View Post
    It depends on your role in the industry. I dont claim to be an expert on this and i dont know all that can be done to prepare, but at the bare minmum id say as a broker you should be trying to incorporate some other products (LOC's, SBA loans, invoice factoring, equipment financing etc etc) particularly if your model relies on high risk, short term, multiple position deals.
    agreed

  14. #14
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Quote Originally Posted by MCN View Post
    People see these headlines so often that they think this isnt a big deal, and its not a big deal TODAY. But its coming. This industry is heading for more regulations and it gets closer and closer everyday. Those who are in denial and dont prepare will be left holding an empty bag and scrambling to figure it out.
    ^^^^^^^100% agree with this ^^^^^^^
    John Celifarco
    Managing Partner
    Horizon Funding Group

    3423 Ave S
    Brooklyn, NY 11234
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    Email: john@horizonfundinggroup.com

  15. #15
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    Quote Originally Posted by MCN View Post
    It depends on your role in the industry. I dont claim to be an expert on this and i dont know all that can be done to prepare, but at the bare minmum id say as a broker you should be trying to incorporate some other products (LOC's, SBA loans, invoice factoring, equipment financing etc etc) particularly if your model relies on high risk, short term, multiple position deals.
    Agreed, but most will gravitate back to what they are comfortable or accustomed to doing rather than learning or exploring other options. Exhibit#1: There are currently over 3000 people on this forum right now. Over a third of the people online are viewing Merchant Cash Advance threads.
    Hedley Lamarr......That's Hedley

  16. #16
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by B2csp View Post
    They cant shut down the industry, his opinion is subjective to the examination of but a few advances given by what we consider even in our industry to be "high risk" funders. MCA operates in a world outside of the banking realm which they might be accustom to, therefore the FTC can make their statements based on their opinion but as long as we do not enter into the "loan" space or use language that suggest we are providing a loan and not a purchase of future receivables then these statements are no threat to the industry. As mentioned by someone else above they might only be able to attack companies providing additional positions when the merchant is clearly overleveraged thereby putting them at risk of bankruptcy, but if the contract is clear in its wording then the merchant made a conscious decision of taking more capital against his future receivables and there's nothing to penalize.

    (as a disclaimer, I am no attorney; just stating my opinion)
    You can have it left, right and in between in the contracts. If the dip**** salesman s saying "loan", if they are selling it as a "loan", and someone has this on tape....well, they have to dead to rights fr false advertising.

    Kids wanna roll their eyes at us older guys, but their recklessness (and let's be honest, downright laziness) will get EVERYBODY pinched

  17. #17
    Member Reputation points: 23 B2csp's Avatar
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    Quote Originally Posted by Chambo View Post
    You can have it left, right and in between in the contracts. If the dip**** salesman s saying "loan", if they are selling it as a "loan", and someone has this on tape....well, they have to dead to rights fr false advertising.

    Kids wanna roll their eyes at us older guys, but their recklessness (and let's be honest, downright laziness) will get EVERYBODY pinched
    Well yeah theres always that possibility when these new guys dont train any of their agents and just tell them to dial and say whatever it takes to bring the client in, then these guys dont deserve to be in the industry. Theres no shortcut, hopefully they're all having training meetings right now and teaching their employees and actually putting in the work. Or else, as you said they will be the downfall of the hole industry as we know it.

  18. #18
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    Been saying the industry will be regulated for 6 years now. Hopefully they administer some type of background checks or licenseing in order to be able to sell cash advances. Our entry barrier is way too low.

  19. #19
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    Quote Originally Posted by B2csp View Post
    Well yeah theres always that possibility when these new guys dont train any of their agents and just tell them to dial and say whatever it takes to bring the client in, then these guys dont deserve to be in the industry. Theres no shortcut, hopefully they're all having training meetings right now and teaching their employees and actually putting in the work. Or else, as you said they will be the downfall of the hole industry as we know it.
    Or the untrained brokers who are pure "salesmen" will be driven out, and it will be better quality people on the phones, and the trained ones will do a much better job, and the idiots will just leave.

    Let's call a spade a spade - Biden is a bit of a wildcard. He went toe-to-toe with Elizabeth Warren to stick up for the credit card industry and bankruptcy law, back in 2005. However, the liberal Democrats have gotten waaaay too much press, and Biden might have to give in to what is probably against his ideology. (He's a Catholic who doesn't currently oppose gay marriage.) So make sure you're able to do higher quality training, and don't grow too fast, and keep on trucking.



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