Nonbank Lenders Face New Disclosure Rules on SMB Loans
New York is set to follow California is requiring non-bank lenders to disclose metrics on each loan; metrics include total cost of capital, the estimated annualized percentage rate and the total repayment amount including the finance charge; these metrics will allow for borrowers to better compare loans from different lenders; OnDeck and Kabbage, two of the largest nonbank SMB lenders, applauded the move by New York; Scott Stewart, CEO of the Innovative Lending group, said to American Banker he hopes New York’s bill, which now awaits Gov. Andrew Cuomo’s signature, will spur California regulators to also require APR disclosures and encourage other states to pass similar legislation. “It’s a huge win for small-business borrowers in New York and hopefully around the rest of the country as we begin to harmonize regulations in other states as well,” Stewart said. American Banker.