[Michael I]

Yo sean, can you just summarize this for me?

i am with andy . cliff notes please

[WhoisKingsley]

lol- Loanme is also a referral based company (from what I understand). You go into their portal and enter the information of the business that is looking for capital and Loanme does the rest. All your doing is providing them a Referral- you are not the broker. They are a "LENDER". Unless you are a licensed broker for a loan product, you can't be the broker in some states unless you have licensing... correct?

What I am getting at from the Loanme website and the referral "law" it is only for "referrals" for loan products? or all Alt. Business Financing Products?

[Funder Mark]

If you are unregistered, basicly the only thing you can do is provide a referral.

[Sean Cash]

Yo sean, can you just summarize this for me?

Yeah, it basically looks really bad at face value. I suggest everyone get attorney opinions before they broker anymore deals in California as it may be a crime going forward.

[Chambo]

I would like to know more information about this too. From my understanding of this in relation to our industry of reselling MCAs and Alt. Business Loans, the "brokers" are considered referral partners, which avoids the requirement to be licensed similarly to how brokers in the mortgage industry in certain states have to be licensed.

Used to be, no longer.

[Funder Mark]

Yeah, it basically looks really bad at face value. I suggest everyone get attorney opinions before they broker anymore deals in California as it may be a crime going forward.

So I was right? Damn, I impress even myself... LOL

[Sean Cash]

So I was right? Damn, I impress even myself... LOL

I just sent the law to a lawyer and haven't heard back yet. So I haven't heard any legal opinions myself, but at face value, this is one of those things where you shouldn't rely on what guys on a forum are saying. The law looks pretty threatening and as I mentioned before, most MCA companies are actually doing commercial loans in California even though they do advances in other states. For all the ISOs out there, I would consult a lawyer to walk you through this.

[AndyYSCISOdept]

So I was right? Damn, I impress even myself... LOL

how does it feel, to be right for the first time? LOL! In all seriousness though you may have been onton something as this could get pretty serious

[Chambo]

If I am reading the entire damn thing, so can you.

In a nutshell, if you are unlicensed and refer (submit a file to) a licensed fund in CA

1) you cannot misrepresent any information or procedure
2) you cannot have anything to do with the funding process
3) you cannot precipitate any gathering of loan documents
4) you cannot forward any of the funding decisions to the borrower
5) you cannot obtain any signature from the merchant on behalf of borrow

[Chambo]

and if you do any of that, the funder is on the hook....

How many licensed funders out there will want to take that risk?

[AndyYSCISOdept]

In a nutshell, if you are unlicensed and refer (submit a file to) a licensed fund in CA

1) you cannot misrepresent any information or procedure
2) you cannot have anything to do with the funding process
3) you cannot precipitate any gathering of loan documents
4) you cannot forward any of the funding decisions to the borrower
5) you cannot obtain any signature from the merchant on behalf of borrow

Question, so lets say I work as an ISO broker at a licensed fund....how doesthi s law propose we do any business if I am not personally licensed?

[Michael I]

In a nutshell, if you are unlicensed and refer (submit a file to) a licensed fund in CA

1) you cannot misrepresent any information or procedure
2) you cannot have anything to do with the funding process
3) you cannot precipitate any gathering of loan documents
4) you cannot forward any of the funding decisions to the borrower
5) you cannot obtain any signature from the merchant on behalf of borrow

but with loan me you are not doing any of that . you are just giving a name and phone number

[brokerCompany]

Looks like loanme wants you to be licensed or they wont accept your deals even though they do everything on the files

[Funder Mark]

So with Loan Me I would imagne you are ok, since it is only a referral, any other traditional ISO with another setup is going to be in trouble. Sean, is this now the LAW in California, or a proposal?

[Sean Cash]

So with Loan Me I would imagne you are ok, since it is only a referral, any other traditional ISO with another setup is going to be in trouble. Sean, is this now the LAW in California, or a proposal?

Looking it up, it already passed and got signed into law. But from what LoanMe is saying, it doesn't go into effect until next month.

[brokerCompany]

So with Loan Me I would imagne you are ok, since it is only a referral, any other traditional ISO with another setup is going to be in trouble. Sean, is this now the LAW in California, or a proposal?

Loanme email: "In compliance with this Law, LoanMe will not be able to accept your California leads as of January 1st, 2016"
You have to be licensed.
I got emails from some other lenders as well so everyone is taking the government thuggery serious.
Wonderful when bureaucrats regulate your lively hood. California will regulate your business and personal life but let the illegals run rampant.
But I am sure a smart creative brokers can work around this.

[Chambo]

Looks like loanme wants you to be licensed or they wont accept your deals even though they do everything on the files

Correct. Looks like going forward, if your ISO company is not licensed, they will reject your deal.

[Chambo]

Loanme email: "In compliance with this Law, LoanMe will not be able to accept your California leads as of January 1st, 2016"
You have to be licensed.
I got emails from some other lenders as well so everyone is taking the government thuggery serious.
Wonderful when bureaucrats regulate your lively hood. California will regulate your business and personal life but let the illegals run rampant.
But I am sure a smart creative brokers can work around this.

Unfortunately, this "thuggery" is necessary, thanks to all the unscrupulous scumbags out there. You remember back in school when one bad kid got the whole class in trouble?

[FUNd]

There is no way to regulate (control) a Broker. A Broker can say and do whatever the broker pleases. Unless you completely strip away the right for a Funding Company or a Lending Company to accept outside sales from an individually owned and operated company, there will still be brokers.

You can regulate programs, products, submission standards, closing standards, and different operations and make "rules" on the way things are put across, but one (not government or anything) can regulate an actual human being.

How about we talk about regulating a standard? That's a good topic or are we going to continue going back and forth on something that isn't going to happen?

The NMLS regulates thousands of mortgage brokers, right down to the proper disclosure of costs and advertising methods. Why would brokers in the business space be treated any differently?

[AndyYSCISOdept]

I don't think anyone is asking to be treated any differently, but as someone who has done this for a long enough time to have seen many "false starts" for regulation , Id like to know what the hell is going on

[WhoisKingsley]

The NMLS regulates thousands of mortgage brokers, right down to the proper disclosure of costs and advertising methods. Why would brokers in the business space be treated any differently?

What controls thousands of mortgage brokers? A PRODUCT that is in favor of regulations to form some type of control on the ways business is conducted.

Why would brokers be treated any differently? The way they are now and will always be. There will always be relationships of seniority, favoritism, and a little slip of some green. I meant money not hash.

[FUNd]

What controls thousands of mortgage brokers? A PRODUCT that is in favor of regulations to form some type of control on the ways business is conducted.

Why would brokers be treated any differently? The way they are now and will always be. There will always be relationships of seniority, favoritism, and a little slip of some green. I meant money not hash.

Sorry, the mortgage product didn't call for regulations for itself, consumers and government did. Same applies here.

[WhoisKingsley]

Sorry, the mortgage product didn't call for regulations for itself, consumers and government did. Same applies here.

As I agree. If there cannot be anything done by self-regulating and doing things right, the consumers and government should. Will a passed law alone vs. a passed law and a system like NMLS work? Probably Not. Can somebody do this? Yes. Will they? Not until they can milk every penny. Is that anytime soon? No, banks aren't getting their worth AND a standard way of submitting and qualifying to the thousands of outlets aren't formed yet. To each his own right now, but as everyone can see, it will happen eventually.

[LoanMe]

lol- Loanme is also a referral based company (from what I understand). You go into their portal and enter the information of the business that is looking for capital and Loanme does the rest. All your doing is providing them a Referral- you are not the broker. They are a "LENDER". Unless you are a licensed broker for a loan product, you can't be the broker in some states unless you have licensing... correct?

What I am getting at from the Loanme website and the referral "law" it is only for "referrals" for loan products? or all Alt. Business Financing Products?

Amanda,

Yes LoanMe is a referral based lender. You are correct in the fact that our partners log into the LoanMe partner portal and submit basic contact information. Unfortunately even when simply referring the California based borrower to LoanMe for a Loan this Senate Bill 197 will apply. Many of you may have received similarly worded emails from other lenders providing LOANS to California businesses and residents. We urge you to read the full bill and make your own determination.

LoanMe provides Business Loans, and does not provide Merchant Cash Advances and therefore cannot speak to if this applies to those lender types.

Here is the section from the Senate Bill 197 which defines a referral:

SECTION 1. Section 22602 is added to the Financial Code, to read:
22602. (g) For the purposes of this section, “referral” means either the introduction of the borrower and the finance lender or the delivery to the finance lender of the borrower’s contact information.

If any of our partners have any questions and/or need additional clarification they can contact us. We are here to help as best we can- in order to comply with this newly passed California senate bill 197.

Remember this Senate Bill 197 only affects submission to us that are California based businesses and borrowers.
This will NOT affect lead submission in the other 29 states LoanMe lends in.

[Advance Smart]

Getting licensed isn't that bad. It's $300 plus a fingerprint fee and time. I personally think it will increase business for good shops. A lot of the fly by nights won't bother.