I recently traveled all the way to Panama to bring you the latest insights on working capital for entrepreneurs. And I have the suntan to prove it. (The picture you see here is actually my view in Rio Hato at the JW Marriott Panama )The International Factoring Association (IFA), the primary trade group representing the entrepreneurial factoring and asset-based lending community, holds an incredibly informative Senior Executives Conference each year. At this year’s conference in sunny Panama City, Panama, leaders from dozens of the globe’s foremost factoring companies gathered with colleagues and industry vendors for continuing education, networking, and key updates on legal issues facing the industry.
Much time was spent discussing how developing federal legislation aimed at merchant cash advance (MCA) and online lending could impact our business, even though we don't necessarily compete. Guests including a US Senator and a Washington DC lobbyist both offered valuable context on the IFA’s growing concerns our industry could get swept up in legislation targeting so-called “shadow banking” -- a scary-sounding and largely undefined term. As lawmakers discuss changes to 2010’s Dodd-Frank Wall Street Reform and Consumer Protection Act, more voices call for laws addressing “shadow banking.”
Recent moves by federal agencies and consumer groups are also fueling concerns that legislation is on the horizon. The IFA reports that Congress has asked the Consumer Finance Protection Bureau to begin collecting data from creditors of small business lending. And the Treasury Department is apparently gathering info from small businesses to gauge their understanding of loan options presented to them by online lenders. Outside government, consumer advocates claim that payday lending is shifting online to avoid state legislation and are calling on Congress to respond with federal laws. If broadly drafted, those laws could inadvertently affect factors.
Then there’s the banking industry. In response to increased competition from MCA and online lenders, the IFA reports that big banks seem to be flexing some lobbying muscle in Washington. A trade group representing the nation’s largest banks recently issued a study suggesting the need to regulate online lending. In response, Google, Amazon, Apple, PayPal, and Intuit promptly formed their own lobbying and advocacy group to counter such efforts. All that posturing has our industry on high alert.
Meanwhile, in typical Washington DC irony, as new lending regulations take shape Congress also seems to be moving to reign in federal financial regulators. The New York Times reported in January that a bipartisan group of senators is working on regulatory reform bills to subject the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and other independent agencies to heightened cost-benefit analysis and review processes when drafting major rules. Those reforms could bring more consistency and transparency to the rule-making process, a silver lining for those of us wary of getting overshadowed by new laws.
The big takeaway is that we need groups like the IFA now more than ever to educate the public about what we do and to advocate on our behalf. The other takeaway is that a meeting of this magnitude wouldn't be complete without some fun-in-the-sun leisure. The Trump Ocean Club, which hosted the conference, proved to be the perfect spot. The local menu and hospitality were second to none. And I was thrilled to take in the lush surrounding and explore a bit. I’ll spare you my slide show, but I will leave you with a few fun Panama facts courtesy of Truenomads.com:
1. Panama is the only place in the world where you can see the sun rise on the Pacific and set on the Atlantic.
2. Panama elected its first female President in 1999 as Mireya Moscoso
3. At its narrowest distance, less than 50 miles of land separate the Atlantic from the Pacific Oceans.
4. Panama houses over 10,000 plants species, including 1,200 varieties of orchids, 678 ferns, and more than 1,500 varieties of trees. And it shelters more birds than the United States and Canada combined.
5. Elevation in Panama runs from 0 m at the Pacific Ocean to 3,475 m on top of Volcan de Chiriqui.