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As the premier trade association of the asset-based lending and  factoring industries, one of CFA’s core functions is to represent its members on critical public policy and legal issues that could have an impact on the commercial finance industry.  CFA’s advocacy program is directed by its Advocacy Committee.

The CFA Advocacy Committee determines the Association’s position and strategy on legislative and regulatory issues that could affect the asset-based lending and factoring industries.  The Committee also works with CFA’s Co-General Counsel  to identify and approve actions the Association takes on legal issues affecting the industry, including amicus curiae briefs.

Advocacy Committee

Led by Chairperson Jill Zellmer of GE Capital, the Committee identified four major issues as top priority for the CFA in 2010. These include

  • Financial Regulatory Reform and Access to Capital for Non-Bank Lenders – The Obama Administration has made increased oversight and regulation of the financial services industry a top priority in 2010. Legislation has been introduced in both the House of Representatives and U.S. Senate to expand the federal government’s ability to regulate the financial services sector. Working with the CFA staff, the Advocacy Committee will work to ensure that the legislation does not contain provisions that would be harmful to secured lending or discourage banking institutions to extend credit to non-bank commercial finance companies.  In additional, CFA will work to educate policymakers on the need for government policies to encourage banks to lend to independent commercial finance companies, as these companies are a significant source of working capital
  • Senate Ratification of United Nations Convention on Receivables – Adopted by the United Nations’ General Assembly in 2001, the main objective of the Convention on the Assignment of Receivables in International Trade is to promote the movement of goods and services across national borders by facilitating increased access to lower-cost credit. In order to achieve this objective, the Convention removes legal obstacles to certain international financing practices, including asset-based lending and factoring. The U.S. State Department has indicated that it now expects to submit the Convention to the U.S. Senate for ratification in 2010  and has asked the CFA to educate key members of the Senate and Obama Administration about the value of adopting the treaty. CFA expects to begin work on generating support for ratification as soon as it is submitted to the Senate for consideration.
  • OCC Risk Ratings and Asset-Based Loans – The Office of the Comptroller of the Currency’s risk rating classifications for loans made by banking institutions do not take into account an asset-based loan’s focus on the assets of the borrower. This often forces the bank ABL lender to classify the loan in a higher risk category than it deserves. The Advocacy Committee has determined that CFA should undertake an initiative to educate the OCC regulators about how ABL works and why the current risk rating classifications may not be appropriate.
  •  Amendments to the Bankruptcy Code – CFA members are keenly interested in any proposals that would amend the business provisions of the federal Bankruptcy Code. The Advocacy Committee actively monitors legislation It is expected that Congressional Democrats may attempt to introduce legislation to amend some consumer and business provisions the federal Bankruptcy Code in 2010. CFA has drafted a proposal to amend the Code to make it more difficult for Bankruptcy Trustees to overzealously apply the Code’s preference claim provisions to secured lenders. If bankruptcy legislation is introduced, CFA will work to persuade legislators to include its proposed fix in any final bill. In addition, a number of proposals to amend the Code are being considered by legislators. 

The Advocacy Committee has formed subcommittees for each of these issue areas identified. The subcommittees will  formulate recommendations of CFA’s position and strategy to address each issue, for consideration by the full Advocacy Committee.

Advocacy Committee
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