1. LOAN BROKER STATUTES

2. Presented by: Robert S. Cohen, Esq. Partner 400 Garden City Plaza ● Garden City, NY 11530 Phone: (516) 873-2000 ● Fax: (516) 873-2010 rcohen@moritthock.com ● www.moritthock.com Long Island ● Manhattan

3. Loan Broker Statutes The definition of “loan broker” varies from statute to statute. Misconception is the statutes only apply to consumer lenders and lessors. Although banks and regulated financial institutions are typically exempt from the definition of loan broker, some of the statutes extend to commercial lenders and equipment or real property lessors.

4. Loan Broker Statutes Several states have enacted statutes regulating “loan brokers” since the early 1990s. ArizonaIowaNebraska ArkansasKansasNorth Carolina CaliforniaKentuckyNorth Dakota ConnecticutLouisianaSouth Carolina FloridaMaine GeorgiaMississippi IdahoMissouri IndianaNew Jersey

5. Loan Broker Statutes The statutes include certain requirements for loan brokers such as: –registration with the state offices; –posting of a surety bond; –establishment of a trust account with a minimum balance; and/or –maintaining a certain net worth.

6. Prohibited Acts Some statutes prohibit payment of fees, commissions or bonuses to merchants, dealers or any other person for referrals of loan business. Other statutes prohibit advertisements by a loan broker that do disclose the loan broker’s name, address and telephone number. Some statutes prohibit a loan broker from performing services for a borrower without a written agreement that contains certain disclosures.

7. Advance Fees Most loan broker statutes prohibit or restrict the assessment or collection of advance fees also known as “up front money.” Some statutes also prohibit or restrict the assessment or collection of commitment fees, security deposits and advance rentals collected prior to closing. Other statutes are worded broadly enough to include direct finance leases and true leases of personal property.

8. Violation of the Statutes Most statutes impose fines for each violation which range from $1,000.00 to $10,000.00 per violation. Some statutes also provide for recovery of actual damages, punitive damages, costs and/or attorney’s fees. Other statutes deem a person who violates the statute guilty of misdemeanor or felony. Some statutes extend penalties to principals, directors, officers and agents of a loan broker.

9. Compliance with Loan Broker Statutes Lack of a physical presence in a state does not necessarily exempt an out of state corporation from compliance with that state’s statute. Consult with an attorney prior to doing business in a certain state to confirm registration and other statutory requirements. Also, discuss the fees you intend to assess and/or collect and timing of receipt of such fees for compliance purposes.

10. THE BALANCING ACT OF AUTOMATIC RENEWALS

11. Presented by: Barry S. Marks Marks & Weinberg, P.C. 505 North 20th Street Financial Center Suite 1615 Birmingham, AL 35202 Direct: (205) 251-8303 Email: barry@leaselawyer.com www.leaselawyer.com

12. No doubt this is how as Lessors may feel when it comes to managing rentals and equipment. Will the customer pay each month? Will I get the equipment back? What will the equipment be worth if I do have to remarket it? And how long will that take?

13. Put your name here

14. So….. you are working hard and doing what it takes to get the next deal….

15. And people like you ……………

16. Maybe this is really how the world sees you. Maybe?

17. What’s wrong with this picture? Not less than 120 nor more than 150 days prior to the end of the term, Lessee shall give Lessor written notice by certified mail, return receipt requested stating whether Lessee intends to purchase the Equipment, renew the Term or return the Equipment in accordance with the terms of this Lease. If Lessee fails so to notify Lessor, the Term shall automatically be renewed for 12 months.

18. from baseball-almanac.com Abbott: Well, let's see, we have on the bags, Who's on first, What's on second, I Don't Know is on third... Costello: That's what I want to find out. Abbott: I say Who's on first, What's on second, I Don't Know's on third.

19. Costello: Well then who's on first? Abbott: Yes. Costello: I mean the fellow's name. Abbott: Who.

20. Costello: Same as you! Same as YOU! I throw the ball to who. Whoever it is drops the ball and the guy runs to second. Who picks up the ball and throws it to What. What throws it to I Don't Know. I Don't Know throws it back to Tomorrow, Triple play. Another guy gets up and hits a long fly ball to Because. Why? I don't know! He's on third and I don't give a darn! Abbott: What? Costello: I said I don't give a darn! Abbott: Oh, that's our shortstop.

21. So……Who’s on first? At the end of the Term, subject to the terms of this Lease, Lessee shall have the option to return the Equipment, purchase the Equipment or renew the Term in each case as provided herein. [elsewhere in the Lease] Notwithstanding any other provision of this Lease, if Lessee elects to return the Equipment at the end of the Term, Lessee shall lease replacement Equipment from Lessor on terms and conditions mutually- acceptable to the parties. [elsewhere in the Lease] If Lessee elects to purchase the Equipment, the purchase price shall be fair market value as determined by Lessor. [elsewhere in the Lease] If Lessee does not return or purchase the Equipment in accordance with the terms of this Lease, the Term shall renew for an additional period of 12 months. At the end of the Term as so renewed, Lessee shall have the option to return or purchase the Equipment or renew the Term in each case as provided herein.

22. If we don’t police ourselves, someone else will do it for us!

23. DOING IT THE RIGHT WAY: FAIR DEBT COLLECTION PRACTICES

24. John G. Rosenlund, CLP Director—Risk Management Portfolio Financial Servicing Company 2121 SW Broadway, Suite 200 Portland,OR 97201 503-721-3211 V jrosenlund@pfsc.com Presented by:

25. INTRODUCTION “Creditors have better memories than debtors.” – Benjamin Franklin ∙ Federal Law: The Fair Debt Collection Practices Act (“FDCPA”) ∙ Enacted in 1978; ∙ Judicial Policy: “Because Congress enacted the FDCPA to protect debtors from abusive debt collection practices...we have consistently interpreted the statute to achieve that objective.”Evon vs. Law Offices of Mickel, (9 th Cir, 2012). ∙ Does not pre-empt State Law. ∙ State Law: May Provide Broader Protection Than the FDCPA. ∙ Example: California and other states expand debt collection laws to creditors collecting their own Debts, such as in house collection departments.

26. FDCPA - Selected Issues ∙ Is it a Consumer or Commercial Debt? ∙ “Consumer” - any natural person obligated or allegedly obligated to pay any debt. §803(3). ∙ “Debt” - any obligation or alleged obligation of a consumer to pay money rising out of a transaction in which the money, property or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced judgment. §803(5) [Emphasis Added]. ∙ Grey Areas -Tough Fact Patterns

27. FDCPA – KEY TERMS ∙ “Consumer” - Discussed earlier. ∙ “Debt” - Discussed earlier. ∙“Debt Collector” - principal purpose of which is the collection of any debts, or-regularly collects or attempts to collect, directly or indirectly, debts owed or asserted to be owed or due another. * Federal Act does not include “creditors” as a “debt collector.” Some state collection practice laws do not have this distinction.

28. FDCPA – REGULATED PRACTICES OF DEBT COLLECTORS ∙ Communication with consumers: §805 ∙ Method ∙ Required Communications ∙ Communications With Third Parties. §804; §805(b). -identify himself. -confirming location information of consumer. -do not state consumers owes debt. -do not send collection letters to employers.

29. FDCPA – PROHIBITED CONDUCT ∙ Conduct the natural consequence of which is to harass, oppress, or abuse any person in collection with the collection of a debt. §806 -6 enumerated examples ∙ False or Misleading Representations §807. -16 enumerated examples ∙ Unfair Practices §808. - 8 enumerated examples ∙ These Statutes provide examples only; they are not exclusive.

30. FDCPA – VIOLATION OF THE STATUTE ∙ Creates Ammunition for Defaulting Party - Actual Damage up to $1,000.00. - Recovery of legal fees/costs. - Class Action exposure. ∙ Bona Fide Error Defense 813(3)(c) - unintentional; - bona fide error; and - procedures in place to avoid error.

31. CONCLUSIONS ∙ Be Preventive! ∙ Document commercial, not consumer transaction. ∙ Be sensitive to FDCPA and applicable state statute laws. ∙ Have procedures for FDCPA knowledge, education and compliance in place to insulate against collection practice claims.