Stay Nimble in the New Year

As we all are still energized after the first in-person ELFA Annual Convention since 2019, trying to absorb the lessons of the off-year elections, and trying to figure out where this infrastructure debate lands, it’s worth looking at what the coming year may hold for ELFA members, politically and policy wise.

During the Convention, the federal government affairs team engaged with ELFA members about the issues facing their businesses. To a person, the conversations were about how to adapt to a changing environment in order to thrive. These were not “woe is me” conversations, they were conversations about how a vaccine mandate might affect their business if they did work with the federal government, how best to start getting ready for the implementation of Section 1071, or what shifts in certain tax policies might mean for certain deal types.  

This is fabulous because 2022 does look like a year where adaptive businesses will thrive, and those that don’t—or can’t—may falter. The workplace is going to continue to adjust to the new normal of the (pick your word) pandemic/endemic/post-pandemic workplace. Savvy commercial finance companies are going to begin to look at how to adapt to comply with Section 1071 but are going to leave themselves plenty of open options in case of developments that are bound to come in this rule. Additionally, the recently enacted infrastructure bill presents lots of opportunities, and if the president’s Build Back Better proposals are enacted in the coming weeks, there could be a lot more to come.


Politically, it seems like many ELFA members are fed up with the dysfunction. There were many more conversations amongst the ELFA membership about whether a third party is viable in this day and age vs. who might fill committee slots should trends continue and Republicans win the House. That being said, it seems like political dysfunction and the whiplash of rapid party switches of control in Washington seem likely to continue in the near term, and the frustration with the dysfunction has not hit rock bottom yet. What was heartening was that ELFA members, despite their frustration with the dysfunction, still see the tremendous importance of the association’s grassroots and political engagement, which will be a critical part of ELFA’s federal advocacy program next year.

With regard to Section 1071, it seems likely that a final compliance deadline is going to be 2024 at the earliest, but there’s a lot of work that needs to be done in order for companies to be ready to respond. One of the areas that ELFA will be focusing on is making sure that our software company members have the information they need to make all the necessary systems changes. A big effort will also begin to help ELFA members, especially those without pre-existing robust compliance departments, comply with these new requirements.

What should you be doing to get ready for 2022? First, invite your local member of Congress to your offices for a town hall and talk to them about what you do, your verticals, and your investments in their/your congressional district. They love these sessions as it allows them to learn and interact with constituents in a productive, efficient way and it makes a huge difference when we’re advocating if a member of Congress understands our business. Second, get ready to be ready for Section 1071: Read the summaries, review your origination process to see what changes might be necessary, and stay tuned to ELFA channels for the latest developments. And finally, stay nimble. Things will change. We don’t know how, we don’t know when, but we know they will.