News

December 1, 2020

Partners Catherine Brennan and Kate Fisher comment for deBanked on what a Biden administration could mean for merchant cash advance

deBanked recently spoke to Hudson Cook Partners Catherine Brennan and Kate Fisher about what legal changes in business to business financing, if any, could be coming with the new Biden administration.

"If the Republicans hold in Georgia, and we have a split legislative branch, that means gridlock, and gridlock is great for the industry," said Catherine. "The more progressive wing of the Democratic Party would like to put merchant cash advance under the auspices of quasi-consumer [loans,] but they won't be able to do that with the split legislative branch."

According to deBanked, Catherine sees the gradual adoption of merchant cash advance (MCA) under preexisting executive agencies like the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) as more likely. She pointed to the Dodd-Frank Act implementing consumer lending data collection as a possible avenue regulators might take by pushing for data collection in the MCA space. She believes that if funders have been responsible and fair, they shouldn't be on the regulators' radars.

Kate Fisher agreed, noting that funders should "expect to be comfortable if they are asked to describe how they comply and prepare to do so. . . . I don't think it is a scary time. It's an opportunity for MCA to improve their processes, make sure they are following the law," she said. "They don't need to be afraid but need to batten down. Much of the industry has already done that, the MCA industry has been focused on adopting good practices."

Catherine Brennan chairs Hudson Cook's FinTech practice. She engages in credit due diligence on behalf of investors in fintech firms, bank partnership platforms, small business lenders, merchant cash advance companies, consumer finance companies, title loan companies and payday lenders. Catherine assists national and state banks, investment banks, consumer and commercial finance companies, mortgage bankers, installment lenders and other licensed lenders in the development and maintenance of nationwide consumer and commercial lending programs.

Kate Fisher co-chairs Hudson Cook's Business Funding practice. She represents banks, finance companies, private equity and investment bank investors, merchant cash advance companies, and small business lenders establishing new programs and products, and conducts due diligence and compliance reviews of consumer lending and business financing portfolios. Kate's practice also includes assisting clients with compliance with state and federal consumer protection and related laws as they develop and maintain mortgage lending, automobile finance and other credit programs.

Click here to read the deBanked article.

Hudson Cook, LLP provides articles, webinars and other content on its website from time to time provided both by attorneys with Hudson Cook, LLP, and by other outside authors, for information purposes only. Hudson Cook, LLP does not warrant the accuracy or completeness of the content, and has no duty to correct or update information contained on its website. The views and opinions contained in the content provided on the Hudson Cook, LLP website do not constitute the views and opinion of the firm. Such content does not constitute legal advice from such authors or from Hudson Cook, LLP. For legal advice on a matter, one should seek the advice of counsel.