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Monday, October 17, 2016
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New York Proposes New Cyber Security Rules
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New York Proposes New Cyber Security Rules
By Tom McCurnin
Proposed New York Regulation 23 NYCRR 500.
After a strong debate, the New York State Department of Financial Services (DFS) has released a final version of its Cybersecurity Requirements for financial institutions. The DFS Cybersecurity Regulation has an extremely wide scope and will be a major factor in how financial entities secure their operations from cyber threats.
The regulation is one of the most comprehensive cybersecurity regulations ever enacted. Starting in 2017, “covered entities” will be required to implement a broad set of cybersecurity programs and other controls.
The readers may not believe they are covered but the definition of a covered entity is any entity required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the banking law, the insurance law, or the financial services law. Leasing companies and brokers are required to be licensed in New York if they loan the principal amount of $50,000 or less or charge 16% or more for the loan. So this proposed regulation may have broad applicability. There are some narrow exemptions to being licensed in New York which are specific to narrow lending business models, but that is beyond the scope of this article. Readers who wish to determine whether they might qualify for one of these exemptions should consult counsel.
As to the proposed regulation, it first requires a covered entity to assess its specific risks and design a program that addresses those risks through a designated cyber-security officer for its own systems and its vendors which might obtain non-public information. Second, the entity must use defensive infrastructure to protect the entity’s information system by encryption by 2018. Third, the entity must be able to identify a potential or actual hack. Fourth, the entity must be able to recover and restore the information system. Finally, the entity must report bi-annually to the Department of Financial Services. For the reports, there must exist an audit trail to allow the Department to audit the entity.
Notwithstanding the requirement to be licensed, the entity may be excused from this cyber-security regulation if the entity has less than 1,000 customers during the last three years, less than $5 million in gross revenue, and less than $10 million in year-end assets.
Compliance must be very quick, as the entity will only have 180 days from implementation of the regulation to fully comply.
What are the takeaways here?
• First, this is disaster for small banks with branch offices in New York, although certainly national banks will be exempt.
• Second, the regulatory burden will be great with government mandated new hires for cyber-security and new policies and hardware changes.
• Third, the burden will not stop at the front door, because entities’ vendors which might have access to confidential information will also have to comply, whether or not they are a covered entity.
The bottom line to this new regulation is that cyber-security is a real problem, and New York is certainly taking a proactive role. My only hope is that other states do not follow this lead.
Cyber Security Regulations (12 pages)
Tom McCurnin is a partner at Barton, Klugman & Oetting
Previous Tom McCurnin Articles:
Position Wanted – Collections
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Each ad is limited to (100) words and ads repeat for up to 6 months unless the candidate tells us to stop. Your submissions should be received here by the end of each week.
Top Stories: October 11 - October 13
(1) Loan/Lease Regulations --- Updated
(2) Sorry No Thursday or Friday Edition
(3) New Hires/Promotions in the Leasing Business
(4) New Hires/Promotions in the Leasing Business
(5) NACLB Conference
(6) Wells Fargo CEO John Stumpf Resigns Effective Immediately
(7) Wells Fargo Reshuffles Top Ranks,
(8) Part III: Starting a Leasing Company and New Markets
(9) LendingClub Corp (LC) Stock Has Learned a Lesson
(10) NAELB Hosts Successful 2016 Eastern Regional Conference
Please Click on Bulletin Board to learn more information
Leasing Industry Ads---Help Wanted Opportunity
Ascentium Capital/Bank of Ozarks Finance
Commitment to Lease or Make Loan Agreements
Perhaps more eDocs are being used for leasing and loan agreements, but most brokers are not so equipment at this time.
In small ticket leases, the actual lease payment is often given and calls for the first and last payment as well as the documentation fee. Often a clause contains a "documentation" fee for $495.00 is noted, along with a clause that it is non-refundable if the lease is not approved. Often the wording is different and seems to be buried. Sometimes it is quite obvious and is spelled out as a processing fee.
Greene Agreement to Keep Expenses
In larger ticket size leases, a form as this is often used, which specifically charges a fee to process the application:
Charges a Fee Form
Business Loans or "Working Capital" loan commitment letters are explicit. This is a form most often used by California License Finance Lenders:
Authorization to Find Lender
The dollar size of the lease proposal often dictates the details and length of the commitment letter.
This form is one of the most widely used in the leasing industry for leases $50,000 and above and covers most of the bases. Note: Last sentences about the signatures makes this more a “proposal,” than commitment. If required, these sentences may be removed.
Lease Commitment Agreement
It is a good idea to have the form you use reviewed by an attorney with equipment leasing experience. This does not mean your college friend who became a lawyer. You wouldn't take your children to an Endodontist to get braces on their teeth, although the practitioner is a "dentist." The same with going to an attorney. You go to a specialist who has experience in the leasing and finance industry.
Some things to consider in your form.
#1: ACH---If you are going to require it or may require it, you should have this spelled out in the agreement. If not in the contract and becomes a requirement of the lease, the proposal is invalid.
#2 Date---It is a good idea to have a time period involved. This can be based on completion of all the documents and/or lease contracts. The time factor may be important, particularly if the matter goes to small claims court, or a higher court, depending on the money involved.
#3 Personal guarantees---of all officers who own 10% or more of a privately held corporation. (This will protect if the final approval comes in with terms and conditions but requires other guarantors who are not named on the application or in the proposal.)
Ideas for Comparing Job Offers
You may find yourself in a position where you are choosing between multiple job offers, or you may be evaluating how an offer compares to your current position. Before embarking on any career search, you should have determined your expectations in every aspect including compensation offerings.
1st Step: Which job is clarifying what you want in your next position? This will help you assess whether the job you are being offered is in the right direction; define your “ideal” job. Request your “Your Ideal Job” worksheet to clarify what your dream job looks like
2nd Step: Compare your current job to offers; make an apples-to-apples comparison. For example, if both jobs offer full insurance, you need to dig deeper and examine specifics that meet your specific requirements.
3rd Step: Compare your current position to a job offer, or you can compare two different job offers against each other. The “Comparing Two Job Offers” worksheet will help you assess the opportunities.
Sample Worksheet for Comparing Job Offers:
“Base Pay,” that may be a particular number:
You could use a “Plus/Minus” system to assess whether a job is a better match to your ideal job profile:
You can also rank the criteria within a particular category; for an example, please request “Nature of Work Ranking Worksheet.”
NATURE OF THE WORK
Taking the time to analyze your offers and current role will give you an upper hand in controlling your present and future career goals. Do not ever just take a job without a complete analysis. If working with a Recruiter, they can go through this process with you.
Career Crossroads Previous Columns
Part IV---Starting a Leasing Company
One of the most important requirements of booking your own transactions with a bank line of credit is to stay within your own market territory. Some vendors sell over a broad range of States and their interest will be for you to fund regardless of the Lessee’s location. You need to retain those that are in your immediate area but sell off those that are out of State or over 200 miles away. It is an old adage in the leasing business that the greater the distance, the greater the collection costs. When a problem develops, it is very serious when you have a startup portfolio so you need to be able to visit the Lessee and get things worked out in a hurry. This becomes difficult and expensive the further the lessee is from your base of operations.
Select an industry that appeals to you personally because if you are interested in the equipment beyond arranging the leasing, the vendors will prefer to work with you and you will get to know the equipment better. I love woodworking so I began by going to woodworking shows and discussing at ength the ability of many of the machines displayed there. Because I took such an interest in the equipment, the vendors did not turn me away when, in the end, I explained my real purpose. Woodworking equipment turned out to be a wonderful market with a lot of local customers in my area.
If you check with your State industrial equipment guides, you can review the manufacturers and vendors that are unique to your market area. Small markets do not interest the large lessors that need national accounts and large volume. I discovered the marina industry in my area, and to my surprise, most of them were very small companies with good balance sheets and several needs from houseboats to floating docks. They also liked dealing with someone that could fund their deals with local banks in their area that understood their business. I also found many new markets by visiting local trade shows and small industry gatherings. There is a great deal of information at the Better Business Bureau and, if you have one, the local business paper that lists all of the new businesses including new vendors.
Also, I like to park my car and just walk around a business park to call on all of the local businesses and small manufacturers to determine if any need assistance. On many occasions, I discovered a real opportunity calling on business with a strange name that did not begin to explain what they were about. I found both lease opportunities and new vendors this way. Walking is good for the spirit.
The other thing that is important is your documentation. For some odd reason new lease companies think they can get by with short or light generic lease agreements. I think that is like thinking that a long rope prevents you from hanging. Proper, complete, well drafted documents are critical to preventing losses in your portfolio. Do not redraft some other company’s documents and put your name on it. Good documents are created to match the markets you serve. Maintenance requirements return conditions, and many parts of the lease agreement should be tailor-made for your vendors or equipment choices. I would also suggest using master leases on all transactions with each type of equipment utilizing its own schedule. In the beginning, many companies think they are going to go full term on all of the equipment and it rarely happens. The more equipment on a schedule, the more often something breaks, or becomes obsolete or just no longer useful. Try and group like equipment together and place large pieces on separate leases. Any money spent with good lease counsel to create good documents is money well spent.
One of best things you can do to shore up your portfolio is to complete a good study on each piece of equipment regardless of size. I know this sounds like overkill, however, in the process you will be forced to ask the lessee questions about its use and that may lead you to a different term than that which was first offered and cut your risk. The more you know about the equipment and its remarketability, the stronger your portfolio will be.
Starting a leasing company takes time and a lot of thought. Do not try and do it quickly, take your time and do it correctly.
Part III: Starting a Leasing Company and New Markets
(Leasing News provides this ad as a trade for investigative
August --The List
GE Capital, Boston, Ma. (08/16) General Electric moves 200 to 300 temporary headquarters in Boston, building a 12 – story glass building for new HQ. http://leasingnews.org/archives/Aug2016/08_31.htm#ge
Bancorp Equipment Finance, Hattiesburg, Mississippi (08/16) Kyle W. Gilliam, CLFP, Past President of the National Equipment Finance Association, and Co-Founder/President/CEO Arvest Equipment Finance, was appointed President:
National Funding, San Diego, CA (08/16) Announces deployed $1.5
Marlin Leasing, Mt. Laurel, New Jersey (08/16) New President/CEO
FinTech Comes to UCC Filing Information
One of the most popular means of creating sales has been through
The UCC data is used to "Find the right prospects to target with your lending
Credit.net updates its filings monthly with the latest accurate information,
Credit.net also incorporates hard-to-find data such as:
The company also provides business credit reports.
Women in Leasing Luncheon
“The Women in the ‘LinkedIn Women in Leasing’ Group hosted their fall luncheon with 40+ women in attendance for a fantastic lunch at Cedar + Stone at the JW Marriott at the Mall of America on October 6th. The event was co-hosted by ECS Financial Services' Shari Lipski and Laura Carini of Financial Pacific Leasing an Umpqua Bank Company. The event was held in conjunction with the 2016 National Equipment Finance Association Funding Symposium.”
Shari L. Lipski, CLFP
Animal ID 12351996
Atlanta Humane Society
The Howell Mill Campus is located at the corner
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Takeaways from #LenditEurope:
Lending Club tightens credit policies
Jim Beam distilleries workers walk off the job,
China gets a new billionaire every 5 days
The 10 worst states for foreclosures
Red Sox Prayer, 2004
Please shine down your heavenly rays upon the boys of summer in Beantown.
Deliver us to victory,
Oh, Lord one more thing:
Monday Night Football ratings tumble 24%
Dolphins stun Steelers, with 204 rushing yards from Ajayi
Bengals vs. Patriots: Score and Twitter Reaction
Odell Beckham Jr. bails out Giants and potentially saves season
Colin Kaepernick’s return can’t rescue 49ers
Jim Harbaugh works Bay Area high school football sideline
California Nuts Briefs---
Home pot delivery is now about as easy as ordering a pizza
What Falling Water Conservation Numbers Mean for California
Napa Valley 2016 Harvest Wraps Up
Sonoma County grower credits great growing-season weather
Wine Ink column: The book of Shanken celebrates four decades
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