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September 9, 2019 • Issue 19:09:01

Nonbank finance:

policies and politics

Fellow panelist Mark Ruddock, CEO of BFS Capital, agreed,
urging the audience to participate in government and pri-
vate sector discussions. "If you lead [discussions], you have
some degree of control over the narrative and can end up
with a win-win for both sides," he said. "It's in our interests
to take a proactive stand and engage with legislators about
these issues."

Adam Atlas, attorney at law, observed some states require
lenders to be licensed, particularly consumer lenders.
"If you're new to the industry, there's enormous work to
be done to create appropriate disclosure," he said. "Truth
in Lending, known in the trade as TILA, requires honest
disclosure. Misleading business lending can get you in as
much trouble as consumer lending."
Tools of the nonbank finance trade

Trade publications, regional and national conferences, and
By Dale S. Laszig not-for-profit associations reflect the nonbank finance in-
dustry's expansion and maturity. Nonbank finance profes-
onbank finance has evolved over the past sionals have access to numerous resources, including:
decade, but experts say lawmakers don't yet
understand its nuances. Industry leaders are • deBanked: A trade publication and resource for non-
N rallying stakeholders to join them in educating bank finance professionals, deBanked held its inaugu-
Washington while promoting best practices from within. ral Broker Fair conference in May 2018. It drew hun-
Their syllabus highlights the differences between mer- dreds of independent brokers and unsecured small
chant cash advances (MCAs) and loans, and consumer and business lenders. Sean Murray, Broker Fair founder
business finance models. Self-regulatory approaches have and chief editor and publisher of deBanked, said the
centered on disclosure, transparency and industry best conference proved "this industry is the real thing
practices. and will be here for a long time." Broker Fair 2019 ex-
In a panel discussion at Broker Fair 2019, an annual confer-
ence hosted by deBanked, Jeremy Brown, chairman at Rapid
Finance and vice president of the Small Business Finance Contributed articles inside by:
Association, encouraged lenders to communicate with reg-
ulators, join trade associations and advocate for favorable Dee and Emily Karawadra .................................................................32
treatment. Legislators frequently equate cash advances
with loans, where borrowers pay X percent or points and X Peter Shenk .............................................................................................34
goes to the broker, he stated. This skews discussions about Suresh Dakshina ...................................................................................36
how much merchants pay for cash advances and what con- Brandes Elitch ........................................................................................38
stitutes a fair price.
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