National Charter Options
The current overlapping state and federal regulatory framework was not created with modern technology and innovation in mind. The misalignment of the national regulatory framework and the technological capabilities of financial technology companies has created barriers and roadblocks for financial institutions like marketplace lending companies. Although a conversation has begun in furtherance of the goal of removing and reducing these barriers, that conversation has not happened fast enough and is not adequately focused to address the true magnitude of the misalignment. Outdated regulations are preventing modern service providers, like FinTechs, from providing the affordable, convenient financial options that small businesses need badly. As banks, financial institutions, and service providers charge ahead into the future, it is important that regulators and policy makers take adequate steps to keep up.
Valid When Made / True Lender
MCAA stands firmly behind the longstanding principle that a bank-originated loan is “valid when made.” We urge federal regulators and Congressional leaders to affirm this principle. To do otherwise would create massive instability in the credit market and the banking industry as a whole. Substantive steps to affirm this principle would eliminate lingering uncertainty in the industry and allow banks, financial institutions, and service providers to unleash a wave of investment and growth that will power the entire economy for years to come.
Small Business Disclosure Transparency
MCAA supports giving small business owners the same protections that consumer borrowers have had for over 50 years. Truth In Lending laws have protected countless consumers from predatory lending practices over the years, all the while policymakers have left commercial consumers out in the cold. Up front disclosures of various terms, including total amount and cost of financing, term length, payment structure, and APR, would help small business owners more easily understand the benefits and drawbacks of their credit options in the market. Requiring lenders to disclose certain information at the time financing is offered is paramount to protecting commercial consumers and creating a more equitable credit landscape as a whole.
IRS Modernization
Modernization of government technology is long past due. For years, as technology has facilitated exponential growth in what people can accomplish, first on their computer and now on their phones, government technology has largely clung tightly to paper and pen. The IRS is no stranger to this delayed modernization, the agency is in a constant state of underfunding, with no hope on the horizon. One way to deliver that hope would be a modernization of the processes that the agency relies on to do its work, taking it from one of the oldest, most outdated government actors to the cutting edge of technological innovation. MCAA urges our federal lawmakers to step up to this challenge and deliver the much needed innovation that the Agency has missed out on for far too long.
Revisit Accredited Investor Standards
The MCAA supports the review and revision of accredited investor requirements by the SEC. The current laws present a high burden to access regulated alternative investments, including small business credit, consumer loans, secured business loans, litigation finance, and real estate investments, and prevent accredited investors from investing in a many new, innovative financial products. A larger pool of players in the investment world can help create a more equitable landscape and give more Americans access to a wider array of investment opportunities.