[soscap]

http://debanked.com/2017/01/new-york...g-and-finance/

[Sean Cash]

The licensing and compliance process: http://www.dfs.ny.gov/banking/licensedlender.htm

[dpFund]

Looks like it only applies for funding amounts of $50k or less.

[WestCoastFunding]

My first thoughts: this would be a boon for licensed "lenders" and brokers. But would this cap the interest rate at 16%? If so, then this would obviously end the NY market for cash advances.

But if cash advances aren't capped, a licensed broker will make a killing. Your competition will become a fraction. Also, you can just sit back and have unlicensed ISOs referring merchants to you all day and split the commission.

[Sean Cash]

My first thoughts: this would be a boon for licensed "lenders" and brokers. But would this cap the interest rate at 16%? If so, then this would obviously end the NY market for cash advances.

But if cash advances aren't capped, a licensed broker will make a killing. Your competition will become a fraction. Also, you can just sit back and have unlicensed ISOs referring merchants to you all day and split the commission.

16% interest has been the cap on loans in NY for years...
25% interest or more on a loan is a crime and always has been...

[FCG]

Well, looks like we have about a year left to make this shmoney.

[MCABroker]

Looks like there is gonna be a mass exodus to the miami-ft lauderdale area this year! Lucky for you guys there's a nice surplus of luxury apartments and seeking arrangement sugar babies!

[Sean Cash]

Looks like there is gonna be a mass exodus to the miami-ft lauderdale area this year! Lucky for you guys there's a nice surplus of luxury apartments and seeking arrangement sugar babies!

The regulations apply to where merchants are located or do business, not necessarily where you are located. If it's a NY merchant, it wouldn't matter if you are in Florida.

[J.Celifarco]

this is only the first more states will follow and that is when this gets really confusing because each state will have its own individual laws and regulations.. this is why I hoped it would be 1 federal law that encompassed everything rather then risking 50 different laws and licenses needed for each state

[Sean Cash]

These regulations haven't passed yet. It was included in the NY State budget proposal.

[J.Celifarco]

These regulations haven't passed yet. It was included in the NY State budget proposal.

ok then we need to wait and see what happens

[CreditGuy]

this is only the first more states will follow and that is when this gets really confusing because each state will have its own individual laws and regulations.. this is why I hoped it would be 1 federal law that encompassed everything rather then risking 50 different laws and licenses needed for each state

The limited charter proposed by the OCC would solve for this. It would be opt in only though.

[funding pro]

ok then we need to wait and see what happens

Not sure this is something where we should wait and see, rather contact our representatives and let them know this is not ok.

Aside from this, New York is making it increasingly difficult to own and operate a business in. I expect to see a continued exodus of businesses in the future.

[Funder Mark]

I wonder if more businesses will move over to Jersey City, like Yellowstone.

[WestCoastFunding]

I wonder if more businesses will move over to Jersey City, like Yellowstone.

I'm sure this pertains to ny-based borrowers - not lenders. If you'd be lending to a company based in NY, then you'd need to be licensed regardless of the state you operate in.

[funding pro]

I understand this applies to where businesses are domiciled, but I'm not sure why NYC thinks increased regulations on business is going to help. Right now I can look out my office and see nearly a dozen commercial spaces that are for rent. I can look across the street and see vacant offices spaces. The new overtime law is flawed. This measurement will hurt a lot of business owners. It's almost as if Cuomo and Deblasio have an act first, think later approach.

[J.Celifarco]

from what I understand where the ISO/lender is located does not matter. If the business taking funding is located in or does business in NY then the lender needs the license. Has nothing to do with where the ISO is located from what I understand looking at this

[Sean Cash]

The limited charter proposed by the OCC would solve for this. It would be opt in only though.

Yes and unfortunately NY is one of the states advocating against the OCC limited charter to prevent circumvention.

[BB_Cooper]

Does this language apply to direct merchant cash advance funders? I believed the proposed language everyone seems to be focusing in on is "or other forms of financing" included within Sec.2. But that term is used in the context of:

"if it solicits loans in the amounts prescribed by this section [within this state] and, in connection with such solicitation, makes loans, purchases or otherwise acquires from others loans or other forms of financing, or arranges..."

The phrase "other forms of financing" is included within a parenthetical, which specifically addresses purchasing loan or other contracts after the point in time where financing has been originated. It seems likes its meant to address transaction formats commonly found in loan syndication and pooling arrangements. When we are talking about soliciting merchants directly, the proposal address licensing for soliciting for loans. A large part of this industry has based itself upon the legal distinction between a loan and an advance contract.

If this passes, will this reverse the trend towards loan products back to advance agreements in NY? Or will we end up like CA where everyone get's licensed, in a better safe than sorry compliance approach?

[WestCoastFunding]

I understand this applies to where businesses are domiciled, but I'm not sure why NYC thinks increased regulations on business is going to help. Right now I can look out my office and see nearly a dozen commercial spaces that are for rent. I can look across the street and see vacant offices spaces. The new overtime law is flawed. This measurement will hurt a lot of business owners. It's almost as if Cuomo and Deblasio have an act first, think later approach.

Considering that the number of businesses in NY is up, I'd blame lack of CRE occupancy on the fact that the new economy doesn't require businesses to use nearly as much square footage as the past.

[Michael I]

does having a California license help you in any way in regards to getting other states ? or are we going to go through each state one at a time ?
is anyone going to try applying to all states now?

[Sean Cash]

one at a time.

[J.Celifarco]

each one seperately each with its own fees and legal costs.. This is an effing nightmare

[Chambo]

each one seperately each with its own fees and legal costs.. This is an effing nightmare

Just like the old Blue Sky laws for states in the brokerage industry. Back then, the fees were ANNUAL too

[WestCoastFunding]

each one seperately each with its own fees and legal costs.. This is an effing nightmare

Or an opportunity to crush your competition.