July 16, 2019 was the 50th anniversary of the Apollo 11 Moon launch. Not only did that successful launch lead to placing the first humans on the moon four days later, it also affected our day-to-day lives, bringing new products and innovations that were created as part of the Apollo missions. Things like computer microchips, cordless tools, CAT scanners, satellite television and numerous other inventions that make our lives better resulted from the efforts of those Apollo missions.
Fifty years later, on that same day, three AFA members, along with our AFA Lobbying Group, launched another successful visit to Washington to lobby Congress and several key committees to continue the important work of the AFA.
The AFA seeks to influence our elected leaders and regulatory authorities to make our lives better for our factoring community from both a legislative and regulatory perspective.
Our two-day fly in was led by Palmer Hamilton of Jones Walker and included Debra Wilson from BAMfi and Tania Daniel from ENGS Commercial Capital. It was great to have such an experienced and knowledgeable team on our visit.
Not having participated in a previous fly in, I did not know what to expect, but Palmer and the team at Jones Walker had everything planned out for our meetings and had prepared focused agenda topics for discussion. We had a detailed agenda and reading material to allow us to quickly get up to speed on the topics.
Our main focus for this visit was to continue to differentiate factors from MCA lenders and to work to insure that Section 1071 of the Dodd-Frank Act would not be improperly applied to factoring. This section of Dodd-Frank will require lenders to gather and report information on applications based on race, gender and other components.
Since factors do not lend money, but rather purchase assets, we wanted to make our position known to as many influencers as possible and to ensure that factors would not be inappropriately required to comply with the regulation implementing Section 1071. Not only would this be a difficult and onerous burden on individual factors, it would
also distort the information that Congress hoped to have compiled, since factoring is not a lending function.
Our two days started with a strategy meeting with Palmer and then we met with leadership from the Small Business Administration; leadership from the Consumer Financial Protection Bureau (CFPB) which is crafting the actual regulation implementing Section 1071; House Financial Services Committee staff; the financial liaison for a US Senator and, finally, a House Member and his team.
Even though we had to suffer in 95-degree heat with the high Washington humidity, we had a very successful discussion in every meeting. We were all very impressed with the Representative from Colorado, Ed Perlmutter, who, as a former bankruptcy attorney, knew quite a bit about the details of factoring!
Everyone we met was aware of factoring and our concerns which speaks to the effectiveness over the past 10 years of our lobbying firm and the numerous members of the AFA who have spent time and money to attend and educate our elected officials.
All of the people with whom we met understood our point of view and were receptive to our ideas. Because the CFPB regulations implementing Section 1071 will not be finalized until 2021, we must continue to educate and inform Congress and request Congressional help to make sure we have the best possible opportunities to help fund small businesses across the U.S. and provide creative solutions to helping businesses grow.
Being new to the fly in process, my main takeaways from the two days were:
- The depth of knowledge and the amount of groundwork that is required to set up these meetings
- The willingness of our elected officials to hear our side of the story and be open to our point of view
- The knowledge and professionalism of our IFA and AFA members and their willingness to contribute time and money to help the industry overall
- The need for more people to get involved and contribute either time or money to help direct legislation that will create a better future for the Factoring industry
We must continue to be diligent in monitoring and managing the receivables. We need to be just as diligent in monitoring and managing the legislation and regulations that affect our industry and our livelihoods.
Just as the launch of Apollo improved the lives of all of society, the continued launches of AFA visits to Washington will hopefully help the lives of factors now and in the future.
The goal of the AFA is to increase membership and financial support from every IFA member. We urge every IFA member to contribute to the AFA as we are in the midst of our annual membership fund drive. Currently, we have Bronze Members who have contributed as little as $500, up to Diamond Members who have contributed in excess of $10,000. This is a very inexpensive insurance policy to help protect our industry from needless regulation which will be both costly and prohibitive. Please consider supporting the American Factoring Association. •