A little banking humor!
Always borrow from pessimists, they won’t expect to get paid back…
Team Margill at ABA Techshow
For 38 years now, American Bar Association Techshow has has brought together legal professionals and technology. This year, the ABA Techshow will take place at the Hyatt Regency in Chicago from February 14 to the 17th, 2024. Come say say hello to the Margill Team at booth 332 to learn more about how our software can help your law firm with Litigation and Client finance.
Criminal interest rate: Canada sets high stakes for high rates
As it revisits decades-old regulations on what constitutes a criminal interest rate, Canada challenges lenders to remain profitable under substantially tighter margins.
These Regulations are necessary to implement amendments brought by the Budget Implementation Act, 2023, No. 1 to section 347 of the Criminal Code. The amendments will lower the criminal annual rate of interest from the current 60 per cent (effective annual interest rate) to an annual percentage rate (APR) of 35 per cent. They will also narrow the types of agreements and arrangements to which this criminal offence applies. Though not yet in force, the Regulations aim to combat predatory lending practices and reform Canada’s framework for consumer financial protection and regulation.
To read the whole story by Guillaume Talbot-Lachance, Matthew Connors and Kaliopi Dimitrakoudis, follow this link.
Margill in Tunisia
Ambassador Lorraine Diguer and the team of trade delegates from the Canadian Embassy in Tunisia met with Mr. Marc Gélinas, founding president of the Canadian company Jurismedia inc., his team as well as representatives of their Tunisian partner DevXperts (5Xperts Group). The discussion focussed on opportunities in Tunisia in addition to celebrating success of this excellent collaboration between actors working in the field of information technologies in both countries.
On the picture, you can recognize: third from the left Patrick Bronsard, senior programmer at Margill, Marc Gélinas, Ambassador Lorraine Diguer, Christiane Duguay, programmer, Mario head programmer and Sophie Binette also programmer at Margill.
To see original post on Facebook, follow this link.
Do I Have To Pay Back This Loan?
Joe Patrice, senior editor at “Above The Law“, offers a helpful guide for anyone wondering how borrowing works for different people.
Earlier this week, Jonathan Turley’s thirst for attention led him to go on TV to describe “car loan payments” as corruption that “none of us have seen the likes of.” Turley is, of course, an idiot. But it did get us thinking: what are the rules for paying back money you’ve borrowed? So we’ve created this helpful annotated guide!
To find out more, follow this link.
Update to the Google Personalised ads policy
In February 2024, Google will update its Personalised ads policy to introduce new limitations on personalised ads relating to consumer financial products and services. Specifically, Google’s ‘Credit in personalised ads’ policy will be expanded to cover ‘Consumer finance in personalised ads’. The updated policy will read as follows:
‘In the United States and Canada, the following sensitive interest categories cannot be targeted to audiences based on gender, age, parental status, marital status or postcode.
Goldman Alums Set Up Matchmaking Platform for Private Credit
Two former Goldman Sachs Group Inc. bankers want to take the $1.6 trillion private credit revolution from Wall Street to Main Street.
George van Dorp and Koen van Vlijmen, who both worked in the American bank’s London office, have built a product that matches small businesses with alternative lenders.
Take a look at this excellent article by Irene García Pérez and Silas Brown on Bloomburg News.
New complete Margill Loan Manager User Guide available
After many years of updates and new features, we are happy to release the new MLM User Guide for software versions. 5.5 / 5.6. The PDF file, which contains a total of 1241 pages, is mostly a document you can consult for specific matters. We do not expect you to read it entirely, unless you really need to fall asleep!
The Guide is the result of countless hours of labor by our Margill team in order to give you easy access to all the features offered in the software. It is complete with tons of images and examples to make things easier to understand.
You can consult or download the User Guide here.
A 47-year mortgage? They’re out there — and even longer ones could be coming
Banking regulator says about $250B worth of home loans are either currently or soon to be negatively amortized.
Canada’s top banking regulator will soon implement new guidelines for the mortgage market, aimed at reducing the risks posed by negative amortization mortgages — home loans where the payment terms have ballooned by years and sometimes decades because payments are no longer enough to pay down the loan on the original terms.
Take a minute to read Pete Evans’ article on CBC news about the consequences on mortgages since the Bank of Canada has hiked interest rates multiple times within a year and a half.
Seamless Legal/Litigation Fees Finance Management and Interest Calculation for Law Firms
Seamless Legal/Litigation Fees Finance Management and Interest Calculation for Law Firms with Margill Loan Manager
Many law firms, particularly, personal injury lawyers (accidents, injuries, claims, liability) will finance their client costs and fees until the settlement occurs, at which time they will deduct these fees, costs and now interest, from the settlement amount. With rising interest rates, it becomes increasingly difficult for law firms to finance their clients without charging interest. Money is longer practically free!
Managing this all the while calculating interest can become quite arduous without the proper system. For all the respect and admiration I have for spreadsheets and Excel, these just aren’t made for this (See Loan Servicing with Excel? Pitfalls and alternatives and 12,000 Reasons why to use Loan Servicing Software as opposed to Spreadsheets!).
Margill Loan Manager (MLM) can, using data from with your other systems, create the actual Case (more or less a loan), import case costs and fees (transactions) in bulk, and calculate the interest throughout the lifecycle of the Case. In some situations, a line of credit is afforded to the client where costs and fees (invoices) are added and payments made occasionally by the client to reduce the balance owed. This latter situation does not factor in success/non-success, so is simply client finance.
For litigation finance based on success, if a case is successful, interest will be charged to the client and fees reimbursed. If the case is not successful, no interest or fees will usually need to be paid back by the client, but the law firm will know its cost of capital, case by case. Most often, the cost of capital to the law firm (so the interest rate its bank charges) will be the same rate as the rate charged to the client, but it could also be higher (margin) to generate a little extra revenue. The interest rate could also be fixed or tied to the bank rate (variable interest rate loans) and could include a spread (so Prime + x%). Simple or compound interest can be used as the calculation method.
Main window where all cases are shown:
Some interesting aspects:
- A graphic Dashboard can show portfolio trends;
- Balances (principal and interest) are calculated every single day, case by case;
- Client names need not appear (they could be identified simply by a Unique Identifier for added confidentiality);
- Extra data can be added such as Case Type, Court Case Number, Region, etc., for data analysis.
Steps in Margill Loan Manager:
1) Line status setup
We recommend using “Additional Principal” type Lines statuses since we will consider the Fees or Costs to be principal (since this is kind of a loan) as opposed to fees as Margill would see them. So change one or many “Add. Princ (X)” Line statuses to the desired names (Tools > Settings > Line Payment Statuses):
You could create only one “Fee” or multiple fees (up to 9 different names if needed).
2) Client and Loan (Case) creation
A Loan / Line of credit or Case in legal jargon, can be created in Margill by entering these data (minimum information needed):
- Start (Origination) Date and First Payment Date (in litigation loans, these are usually the same date)
- Interest rate (or Interest Rate table)(could also be a default rate so could not be needed)
- Unique Loan ID (from other system)(required only for auto import)
Any other data can be entered as required (court case, client names, email, address, mobile, case type, active or draft, and other special data…).
This information is entered in the Data window either:
- manually;
- in bulk manually via a simple Excel file;
- in bulk automatically via an Excel or JSON file (what we call “hot folders” where, when a file is deposited in a specific folder, Margill will automatically grab the file and import the data).
Since law firms can use a wide variety of systems – practice management solutions and accounting systems, a data conversion app may be required to convert third party data to a format accepted by Margill Loan Manager (JSON and Excel files). This can be developed by our programming team.
Typical Excel sheet for Case creation in Margill:
Principal amount is required but is usually 0.00 as case Costs and Fees will be added as line items (see 2) below)
The Case(s) will then appear in the Main MLM window with nothing really exciting so far – only the basic data. It gets fun when transactions are added!
3) Cost and Fees (transaction) import
Once a Case if created, Costs and Fees (and payments) can be imported at any date after the Start (Origination) Date. They can be entered:
- manually Case by Case (for very low activity volume)
- manually for multiple Cases at once
- in bulk with an Excel sheet manually
- in bulk with an Excel sheet automatically
For the bulk imports, the Excel sheet must follow this precise mapping:
For any auto imports, the ISO date format MUST be used: YYYYMMDD
3a) Cost and Fees (transaction) import from other systems
If your law firm must import data (transactions) from an accounting software (QuickBooks or other) or a practice management system and this system does not support the production of an Excel sheet as above, a special conversion application can be created by the Margill programming team that converts the file your system produces, to the Margill format which can then be imported manually or automatically. Such an app saves time and avoids errors.
4) Special situations
A host of special situations can be handled by MLM (the numbers correspond to the red numbers in the image below):
- (1) One or many, up to nine (9) Fee types (Lawyer Fees and Expert Fees – could be named as you wish – Medical Expense, Expert Expense, Medical Expense no interest, etc.).
- (2) Line 5 shows the $666.36 Lawyer Fees that do not bear interest (blue Line status and Pmt Type column).
- (3) As of 1/29/2023, interest is no longer charged on all amounts since maximum 3 year Term (optional of course). Line color was changed to red to highlight the End of Term.
- (4) An Invoice number was added for each invoice.
- (5) A Comment may be added on any line.
- (6) Final settlement of $21,250. All interest got paid first but we could have paid the $19,760.83 in Principal (the Fees) and there would have been an interest balance of $39.44 instead of Principal balance for this amount – you have the options with the Line statuses.
- Interest can start 30 days after the invoice date so the Pmt Date entered would be the invoice date + 30 days. The actual invoice date could be in another column (not shown below).
- The Case can also be lost in which case, instead of a Payment at the very end, there would be a Line status that could be called “Loss” or “Bad debt” to bring the balance to 0.00 and to isolate the fees and interest as unrecoverable for your accounting (not shown below).
- Many other options are available…
5) Reporting
You can create your own reports for any time period using over 1000 fields. Typical reports would be daily, weekly, monthly, quarterly, yearly…:
- Disbursed Costs and Fees
- Interest generated (accrued)
- Interest actually paid or collected (as opposed to simply accrued)
- Fees by Case type
- Cost and Fees paid back
- Fees lost (Case was lost)
- Balances
- and many more, such as socioeconomic information for decision makers (statistical data).
Please contact Margill support ([email protected]) for more information.