Commercial Hard Money Lenders Do Not Fund Terrorists

In California, the noose has tightened around online financing industries since the high incidence of terrorist attacks that happened on American ground largely starting with 2001. Local government came across new regulations and scrutiny that more recently (Dec. 2015) included the California Office of Business Oversight. Several observers are concerned that California’s hard money lenders may unknowingly fund terrorist activity. This article shows how such fears are ungrounded. Easy Credit Licensed Money Lenders Singapore


Towards the end of 2015, a series of events mentioned that at least one online US-based private loaning company had unknowingly abetted terrorism. Sources near the investigation said there are no known indications that the terrorist activities in question were linked with any foreign terrorist business such as ISIS. 

However, terrorist experts say that the anonymity of these online private lending organizations makes it theoretically possible to use them to send funds to specific individuals. The borrower’s id is protected and shareholders can’t research for a particular loan applicant by name.

The government was also worried to find that financial loans issued through online lenders have increased rapidly in the last year, calling into question whether the industry needs to be regulated more heavily. According to Morgan Stanley, online lenders granted $14 billion worth of loans in 2014.

On an earlier investigation, the California Department of Organization Oversight found that some business owners and consumers do not fully understand the conditions of the loans they receive by these online lending companies. This could result in, what is called, “predatory lending”. Another study conducted by the Federal Reserve Table and the Federal Arrange Bank of Cleveland in August 2015 found that small-business owners have difficulty comparing credit products offered online by alternative lenders. Some lenders, for example, only cite amount to be repaid daily while others cite an annualized interest rate.

Under Washington dc state law, the Office of Business Oversight (DBO) requires that loan rates be explained “fully and clearly” to borrowers. Condition licensing laws also require that the lender measures the ability of the borrower to afford the repayment prior to lender profits with the transaction.

Failing to abide by these requirements, together with their links to terrorist funding, place a DBO inquiry into motion.

California recieve more than 500 private hard money lending companies. A few of them are concerned that the point out inquiry has put the industry in a severe spotlight which there could be a regulatory overreaction.

Leave a Reply

Your email address will not be published. Required fields are marked *