March in Minnesota is unpredictable. We always have the uncertainty of the outstate-vs-big-city drama in our nationally known state hockey tournament and, of course, the NCAA brackets. But our most popular conversation topic is weather – more specifically, snowfall. This year has been a near record year of snowfall for both the winter and for March. Most of our end-of-the-driveway snow piles are over six feet high. This year March definitely came in like a lion – but that isn’t all bad for those of us who love the extended weeks of cross-country skiing!
But March has brought another storm of uncertainty for the finance world, with the collapse of Silicon Valley Bank followed quickly by several other regional banks and Credit Suisse. The age-old partnership between business management and regulation immediately came under fire. Shouldn’t management have foreseen the effects of record interest rates on asset integrity? Why didn’t regulators raise the flag 90 days earlier and avoid the bank collapse? In most reports, the regulations look a bit lamb-like given their oversight responsibilities.
In mid-March the Monitor Daily reported a survey regarding the California disclosure law enacted late last year, showing that 40% of respondents are “no longer lending” to prospective borrowers who fall within the regulations’ thresholds. A 40% reduction in available lenders and/or capital is significant. It appears the disclosure regulations are having a lion-like impact on both borrowers and lenders.
I just learned at the ELFA Executive Roundtable conference that the Consumer Financial Protection Bureau is expected to issue their final ruling soon on implementing the small business data requirements of Section 1071 of the Dodd-Frank Act. Section 1071, like the California disclosure law, could have a lion-like impact on lenders’ abilities to comply and could further stress the availability of capital for small businesses across the nation.
Tamarack does not provide legal advice on any of these issues, but we do stay current with regulations as well as how both software and data can help finance companies navigate and even thrive under tighter information constraints.
Whether you need better visibility into your portfolio asset integrity, help getting your software to comply with disclosure constraints, or support understanding the pending impact of 1071, give us a call.
We are ready to help you face these lions.
Daniel Nelson, CLFP, founder and CEO, Tamarack
