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  1. #1
    Veteran Reputation points: 134971 Chambo's Avatar
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    And So it Starts....

    CFPB Signals Alarming Interest in Small Business Lending

    November 10, 2015
    By: Sean Murray

    red alertThe Consumer Financial Protection Bureau posted an alarming job opportunity on LinkedIn last month for the position of Assistant Director for Small Business Lending Markets. Ominously self-labeled as an “Expression of Interest” rather than a job opening since the job is not currently open to applications yet, the CFPB has inadvertently revealed its own expression of interest in small business lending.

    If there was any doubt that data collection required under Section 1071 of Dodd Frank was never going to happen, the CFPB also revealed that there will not only be a person responsible for small business lending, but in fact an entire team. And they won’t just be collecting data, but they’ll be monitoring it, analyzing it, interpreting it, and advising on rulemaking, according to the listing.

    Candidates are being offered a once-in-a-career opportunity to make the market for small business finance fairer and more transparent.

    So much for just collecting data, the CFPB apparently plans to directly insert itself into the fairness of transactions conducted between commercial entities.

  2. #2
    Senior Member Reputation points: 32550 Funder Mark's Avatar
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    How exactly does fairness mix with capitalism? Something is screwy over here.

  3. #3
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    And So it Starts....

    Fairness is never fair same as the affordable health care act is not affordable.

  4. #4
    Senior Member Reputation points: 32550 Funder Mark's Avatar
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    Lately, more people are starting to call it the UN-affordable care act...

  5. #5
    Quote Originally Posted by Funder Mark View Post
    Lately, more people are starting to call it the UN-affordable care act...
    Yup, just received notice that my policy is increasing 38% next year...where's that $2,500 per year savings I was promised...

  6. #6
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    More regulation does not have to be such a bad thing and hopefully like in the mortgage industry it will help to rid some of the rotten apples.

  7. #7
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    anyone who thought that this industry would go on forever without any regulation I think is kidding themselves. What we have to hope is that the big players in the industry take an active role in helping to shape the regulation so it doesn't kill us completely
    John Celifarco
    Managing Partner
    Horizon Funding Group

    3423 Ave S
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    T: (347) 773-3990 | F: (718) 795-1990
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  8. #8
    Senior Member Reputation points: 32550 Funder Mark's Avatar
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    Disagree Entirely

    Quote Originally Posted by Ktolbert85 View Post
    More regulation does not have to be such a bad thing and hopefully like in the mortgage industry it will help to rid some of the rotten apples.
    The reason why alternative financing is expanding so rapidly is BECAUSE of the regulation hurdles that banks face. If there is one thing which would literally destroy us, it is a massive increase in regulations.

  9. #9
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    Quote Originally Posted by Funder Mark View Post
    The reason why alternative financing is expanding so rapidly is BECAUSE of the regulation hurdles that banks face. If there is one thing which would literally destroy us, it is a massive increase in regulations.
    I couldn't agree more with you on this point. This is the reason that there have been so many articles, threads, blogs, posts etc about the importance of "Self policing" etc. I understand we can only do so much as a collective, but indivudals making sure they're doing their best to be fair honest and transparent will have a great impact.

  10. #10
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    I think most of the new regulations will be towards regulating brokers and hybrid lenders and minimal regulations for companies backed by big banks. We know how much the government loves big banks.

  11. #11
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    Regulate what? They trying to stop Title loans to consumers and payday loans to consumers for decades. Seems like we are B2B perhaps more disclosure but would take a very long time they just passed some new mortgages laws that have been in the works to pass since 2008.
    Last edited by mcaguru; 11-12-2015 at 11:23 AM.
    Marcus Clapman | Business Development | Cresthill Capital
    (High Commissions Payout Group)
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  12. #12
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by rick_clsfunding View Post
    Yup, just received notice that my policy is increasing 38% next year...where's that $2,500 per year savings I was promised...
    Quit your insurance and go on the exchanges for a cheaper one

  13. #13
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by Funder Mark View Post
    The reason why alternative financing is expanding so rapidly is BECAUSE of the regulation hurdles that banks face. If there is one thing which would literally destroy us, it is a massive increase in regulations.
    It wouldn't destroy the industry one bit. The small ISO shops, the unscrupulous reps, who bank on and rely on fees and stacking and the like, yeah, THEY are screwed....but is the industry screwed? Hardly

  14. #14
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    Calm down Chamo, I understand you know, But nobody is screwed.. Lol.

    Quote Originally Posted by Chambo View Post
    It wouldn't destroy the industry one bit. The small ISO shops, the unscrupulous reps, who bank on and rely on fees and stacking and the like, yeah, THEY are screwed....but is the industry screwed? Hardly

  15. #15
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    Quote Originally Posted by Chambo View Post
    It wouldn't destroy the industry one bit. The small ISO shops, the unscrupulous reps, who bank on and rely on fees and stacking and the like, yeah, THEY are screwed....but is the industry screwed? Hardly
    How is that not destroying it? There are a lot of people out there making a lot of money with the way things are, now keep in mind Im neither saying its right nor wrong, Im just saying that if things changed that dramatically that would constitute "destruction". But who knows maybe that wouldn't be a bad thing and we could build it up even better than before.
    I'm still for "self policing" as the best course of action IMO

  16. #16
    Veteran Reputation points: 134971 Chambo's Avatar
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    Like I said McFly, those reps are screwed....but the industry as a whole will plow on forward

    Heck, it might even HELP the industry and their image

  17. #17
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    I told you not to call me McFly in public.

  18. #18
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    shots fired

  19. #19
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    over regulation would kill us. Some regulation I agree with Chambo here might not be a bad thing. Personally my biggest issue is that there is no barrier to entry into the industry which has led to the saturation we see now.. Anyone with a phone and time on their hands can open an ISO and they need nothing to do it. I would love a way to stop the influx of no nothing schmucks starting in this industry day after day. All they do is make the rest of our jobs harder.
    John Celifarco
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    3423 Ave S
    Brooklyn, NY 11234
    T: (347) 773-3990 | F: (718) 795-1990
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  20. #20
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    Preach it!

  21. #21
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    We tried self-regulation with investment banks...that worked out real well.

  22. #22
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    And So it Starts....

    Been beating that drum forever. There is simply not enough pie for all the ISOs that are out there. Funders see volume, because there are so few of them, and even one submission a week from 200-300 active ISOs (which I know is on the low side) is enough to keep their reps nice and busy. It's harder than ever to be just an ISO, which is why I've seen so many struggle and go under, or just morph into a WBL branch - failing ISO to funder in a matter of a day...

  23. #23
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Quote Originally Posted by Lexgroup View Post
    We tried self-regulation with investment banks...that worked out real well.
    true story
    John Celifarco
    Managing Partner
    Horizon Funding Group

    3423 Ave S
    Brooklyn, NY 11234
    T: (347) 773-3990 | F: (718) 795-1990
    Linkedin: Profile
    Email: john@horizonfundinggroup.com

  24. #24
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Quote Originally Posted by FUNd View Post
    Been beating that drum forever. There is simply not enough pie for all the ISOs that are out there. Funders see volume, because there are so few of them, and even one submission a week from 200-300 active ISOs (which I know is on the low side) is enough to keep their reps nice and busy. It's harder than ever to be just an ISO, which is why I've seen so many struggle and go under, or just morph into a WBL branch - failing ISO to funder in a matter of a day...
    the one good thing is that even though they can all get into the industry, very few will last. They are getting to the party late and without a serious marketing budget they wont stand a chance. They don't have the knowledge and or capital to compete. That said while we wait for them to fail they area complete pain in the ass
    John Celifarco
    Managing Partner
    Horizon Funding Group

    3423 Ave S
    Brooklyn, NY 11234
    T: (347) 773-3990 | F: (718) 795-1990
    Linkedin: Profile
    Email: john@horizonfundinggroup.com

  25. #25
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    This is an exhausting topic. There are so many parts of this industry that we are basing the word "Regulation" as a cap on everything that applies to what we do everyday. What needs to be regulated when it comes to the Sales/Broker Side is the "Handle" first.

    "Handle" What happens after you get a lead. That time in between Funding and the knowledge that is no trade secret that needs to be in the hands of the originating sales office.

    The companies/people that do not characterizing themselves correctly and not gaining/providing the right knowledge and relationships to do business the right way. This isn't going to be stopped. Why? Funding Companies NEED ISOs. They are the ORIGINATING SALES OFFICES that bring the food to the table. ISOs are actively seeking Funding Companies to partner with because the rush to fulfill the merchants REQUEST is overpowered by what they actually qualify for. Example: Broker tells merchant what they want to hear, pre-approval/offers, fax messages, emails, mailers with X amount just for your business- Lies.

    Providing lies costs money. The tactics OSOs are using are rising costs for the merchant because they are not following the Funding Company's submission standards (UW specs). This also wastes UW time ($) and after you send in 10 submissions that don't pass the qualification check, gets backdoored, etc. It leads to more aspects that need to be regulated because all people are seeing is high commission payouts.

    Should there be an validation to work in the industry as an originator? Yes, but to an extent. Sole Brokers and Brokerage Firms acting as Originating Sales Offices for Direct Funding Companies should be separated but have the same submission, qualifying, and closing standards. These standards should be made public because this is the main factor of this industry that is no trade secret and will alleviate a lot of transparency issues.

    Anyone can get a lead... the "handle" is a major regulatory concern.
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