Think Buying Licenses Is Easy? The Reality of Debt Collection Acquisitions | Cornerstone Licensing | Ep. 222

Adam Parks (00:07)

Hello everybody, Adam Parks here with another episode of the Receivables Podcast. Today I'm here with the Cornerstone crew. I've got Joel and Christy here to talk to us about what it means from a licensing perspective when you buy a debt collection or a debt buying company and what that means. A lot of conversations we hear out there in the M&A space is, I'm gonna buy that company because I need the licenses.

But what's the realities behind that and what does that actually look like from a practical standpoint? So I thought I'd bring on the best experts that I could find, the most knowledgeable people on this particular subject. So Christy and Joel, thank you so much for joining me today. I really do appreciate you coming on to share your insights.

Christy Y Barger (00:49)

Thanks for having us.

Joel Blackburn (00:50)

Thanks for having

us.

Adam Parks (00:51)

So for anyone who's not been as lucky as me to start to get to know you through the years here, starting with you, Christy, could you tell everyone a little bit about yourself and how you got to the seat that you're in today?

Christy Y Barger (01:00)

Yeah, absolutely. Thank you for that. So I've been with Cornerstone almost 20 years. I love this company. I started as a renewal specialist and I think I've sat in just about every seat along the way through the years. I did some assistant managing, then became the manager of the initial department, then kind of moved into the inside sales and now I'm responsible for all of the sales of the company. I'm a senior director of licensing and we've got a team that

works with agencies to determine what licenses are needed with the help of counsel. And we are the people that go get the licenses. My background is I started in legal. I wanted to do something in legal. When I was in high school, I was working for the solicitors office. So I got to hear a lot of court cases and DUIs and all those misdemeanor type traffic offenses and battery and those type of offenses. I then went to work for a law firm, very well known in our area. And they

did all types of practice. Their biggest one, I worked for the senior partner, he would represent companies and individuals, mainly individuals who were having their land condemned for new railroads or new roads or new power lines. We had a lot of very large cases against Georgia Power here in Georgia where they would come out and offer the homeowner pennies on the dollar for their land.

And then after we would spend, you know, and months in the courtroom, would, the money that they got, while they still had the power line in their backyard, at least they were compensated for their loss. So really enjoyed that. Property was kind of my excitement, but I loved being in the courtroom. Then I came to a point where I live in a small town, so I needed something a little more challenging. I...

reached out and started working with our original owners here at Cornerstone, Matt Pridemore. And he hired me on and it's been a great journey. I've enjoyed every piece of it. We're a big family over here and we care about our clients and that's one of the biggest things that I say sets Cornerstone apart. know, have the integrity. We want to do what's right for our clients. We're not just there to get them licensed if they don't need it. So we really pride ourselves on the relationships we form with our clients.

Christy Y Barger (03:01)

So that's that's kind of what brought me to Cornerstone and where I'm at now

Adam Parks (03:05)

Well, let me tell you that knowledge base is really what I'm looking to tap in today. And, you know, hearing about the eminent domain portion and your work in there, I've got so many questions as it relates to that too. we're going to different, different discussion for a different day. but always my favorite part of the podcast hearing about how people came to this particular space because no two journeys are exactly the same. Joel, how about you? How did you get to the seat that you're in today?

Christy Y Barger (03:13)

Yeah.

Different day.

Joel Blackburn (03:28)

Yeah. So when I graduated from college, I worked for a manufacturing, a big manufacturing company doing accounting and analysis for them for about three years. And I had one of my mentors really encourage me at that point in my life, you know, you're not going to get these untethered years back. So he encouraged me to not dig too deep into the corporate world too fast. And so based on, you know, that and a lot of

Just a lot of decisions I made. I quit my job, sold my car, and went backpacking in South America and Central America for about nine months. And I'm really glad I did. It was very true. You don't get those years back. So I did it at a time when I didn't have too many things tying me down back home. So when I came back, this was June of 2009, my intention was just to basically fill my bank account back up and get back on the road.

Because I made a lot of connections down there. I love I love Spanish. I love the culture. I love just the the semi nomadic experience or whatever So Matt Pridemore I talked to him in November of 2009 and you know, he just said, Hey, I'm looking for somebody to do marketing for for Cornerstone. Would you be interested in that? Cuz I I'm not gonna say I'm a marketing person, but I am semi creative. So like it appealed to me to a degree

And I was working at Chick-fil-A at the time. So I was like, yes, that sounds like a very, very good step up for me. So anyway, I was like, yeah, you know, my intention is to head back to South America. Are you OK with that? He's like, yeah, just give me give me some advance notice. So. Fast forward 15 years later, sitting right here, wife, two kids and safe to say I'm tethered at this point, but I am very grateful for it. Cornerstone, like Christy said, has been.

Adam Parks (04:53)

Sure.

.

Joel Blackburn (05:15)

an amazing company. It's so much fun to be in such a kind of a niche industry and even a niche within a niche industry. I've done a lot of things at Cornerstone. I started in marketing. I did a little bit of accounting. can't seem to shed that part of my history as hard as I try to. But yeah, I ran our surety bonds department for about 10 years and kind of conglomerated our business services like registered agents.

background screenings, business formations, kind of all of those ancillary products that go along with the licensing. I ran those products for, I guess, the last four years or so. And so today I'm actually working in Christy's team in sales. So it's a new challenge for me. I never ever thought of myself as a salesperson. And I just had an interesting chat with my boss, our CEO, Jeff, back in October, I guess.

And he was just like, hey, I've got this idea. And turns out his idea was way more fully baked than I realized at the time. But he thought I would fit well in Christy's group. it's been a blast, I have to say. The thing is, I've been having these conversations with our clients and prospects for a long time at the trade show booth or whatever. It hasn't been my official role. So it's been really fulfilling to get to.

Adam Parks (06:19)

you

Joel Blackburn (06:35)

find solutions for people because people come to us, you know, really looking for that expertise and really looking for some hand holding and just some pushing in a positive direction. And it gives me a lot of satisfaction to know like you came into this call or this conversation really stressed out and now you see a path forward. Like that gives me an immense amount of satisfaction. So I love the excitement and the challenges of getting to find really customized solutions for folks in a heavily regulated industry.

Adam Parks (07:04)

Well, licensing is a consultative sales approach. It's not like you're just trying to sell somebody you're trying to demonstrate or help them navigate the path forward. Like you mentioned, the surety bonds, corporate formations, registered agents, all of the different pieces and parts that ultimately go into a successful licensing arrangement. And all of these organizations needed and having an organization in the space that specializes in it and can provide those ancillary services I think is really important.

Joel Blackburn (07:12)

Yes.

Adam Parks (07:32)

Which leads us to today's conversation as an organization, as individuals that spent a lot of time helping various organizations around the space

So let me start with the burning question on the mind of the audience, which is, okay, I'm gonna go buy a new, I'm gonna go buy a collection agency XYZ and now I'm gonna be licensed. Help demystify that statement.

Joel Blackburn (07:58)

Yeah. Now it's a great question. I think that question is coming up more and more. mean, I remember sitting in some ACA session probably five years ago where they were just talking about how much consolidation was going to be happening in our industry. And I mean, it is, it's a real thing. And I think COVID in many ways just accelerated that. There's a lot of questions that need to be asked upfront.

I think one of the biggest, if not the biggest is, is it gonna be an asset purchase or is it gonna be a stock purchase? Because that is going to play a massive role in what licenses carry over and which licenses don't. An asset purchase, even though there's a lot of advantages to it from the tax standpoint, the asset purchase essentially means you are a brand new entity when it comes to licensing. None of that is going to translate.

Joel Blackburn (08:47)

your certificates of authority at the state, the secretary of state level, those are not going to transfer over. So you are literally starting from scratch if it's an asset purchase. I don't want to glamorize the stock purchase either because there's a lot that changes with that as well. But the asset purchase for sure is going to mean you are starting over. And Christy we had this come up on a call last week, I believe, where

Adam Parks (09:01)

you

Joel Blackburn (09:15)

You rattled off a host of questions, like the EIN and things like that. What's the host of questions that you ask at that

Christy Y Barger (09:25)

Yeah, absolutely. And that's where it gets into. It's not one answer. have to get there's levels and levels that we have to go through if questions as Joel said asset versus stock. That's the first question that we're going to ask because there's differences in licensing requirements at that point. It's it's important to know that licenses are not transferable, but some of them are amenable. So let's say we have an asset purchase like Joel said, that's a total start over. It's pretty easy to discuss that loss.

going to need certificates of authority, we're going to need new licenses. Let's say you want to use the company name that you bought. Well, you've got to go then withdraw all the licenses that they hold. You've got to withdraw all the certificates of authority that they hold because you can't have two companies with the same name, different FAIN numbers. So that can kind of get messy and it's a longer process. A lot of people, especially when they have, you know, the M&A, a good M&A firm like, you know, Corporate Advisory Solutions or someone like that, who knows how things work.

Christy Y Barger (10:21)

A lot of the deals will be stocked. But as Joel said, that's not a get out of jail free card. There's still things to do. Kind of running down the questions, obviously after the stock and asset, we're going to ask about the current ownership of the company. It matters if it's owned by individuals or if it's owned by another entity, holding company. That affects how the process is going to go because that's either a direct change, if it's individuals, or indirect if they're purchasing not the licensed entity.

Adam Parks (10:21)

Thank

Christy Y Barger (10:47)

but the owner of the licensed entity. So that's a very important distinction is if there's a holding company in place, it affects licensing. It's a better scenario if you have a licensed entity owned by a holding company. And so when we're talking to people, yeah.

Adam Parks (10:57)

Okay.

No, when you say that, let me ask a question there is,

so are you suggesting that it's easier if the holding company is purchased versus the sub entity? So if somebody is buying the holding company that oversets that licensed entity, okay, I'm just making sure that I'm following.

Christy Y Barger (11:10)

Absolutely.

Yep, absolutely.

Yep, no, that's a great question and that's exactly correct. You want to purchase that holding company if there's one in place. When we're talking to people on the front end and they're just starting a company, we talk to them about structure because that's very important because if they want to sell, if they want to have an exit plan, whether it's five, 10 years later, having that holding company own the license entity is huge. So let's say it's owned by individuals at an indirect level. I'm sorry, at a direct level.

We then need to know, you changing the name of the company? Are you changing the corporate ending? Are we doing it in entity conversion? Are we going from an E to an LLC? Are we going from an LLC to an E? That is a huge first question we're going to ask is the name and the entity type because that matters. We're going to ask if they're going to change their domicile state because some companies will do that. They'll move their domicile state, say it's Texas, they'll move it to Delaware for tax reasons, which is great, but it affects your certificates of authority and your licenses.

So that's another level of information we have to look at. If that federal tax identification number changes, that's a new entity. Whether you're using the same name or anything, if that tax number changes, we're licensing from scratch. So that's a very important thing to know is you have that FEIN number has to stay the same. We then kind of go into what is the ownership going to be after you acquire it, whether it's direct or indirect, we need to know how it's going to be broken down.

So it's important to be consistent with the states. So obviously we know a lot of the states are on the NMLS system now. That helps with the consistency, but there are states that are not in the NMLS. So whenever you're looking at disclosures, we kind of refer people over to the definition of a control person that's provided by the NMLS. It's on their website. Note, you can kind of find some conflicting information. So we kind of go by their guidebook where it really breaks it down. And plus we've done this for so long.

Christy Y Barger (13:03)

We know what the states want. So there's places where it says, you know, if somebody is a 10 % owner, if they're a 25 % owner. Basically, you need to know that the NMLS is going to require 100 % ownership disclosed at the direct level and the indirect level. Now, whether or not the owner has to do that MU2 form and the fingerprinting of the credit reports, that has a determining factor of a percentage. But basically anybody that owns 10 % or more, or 100%, you've got to show

that full structure, the full chain of control. And so that's very important to know how that is. A lot of people will buy from individuals and put that holding company in place. That's great for future reference if they want to then go out and sell it. They've got that wallet to next to set now. It's something that's done for future exit planning. Obviously that's a lot of people will do this over the years, even 10 or 15 years ago. I remember some of the larger companies being acquired by one company and then

Adam Parks (13:57)

leave.

Christy Y Barger (13:59)

They kept their licenses for a while, then they ended up consolidating. So this has been happening for a long time. And the states, they know what happens, but they are very particular on the process. They know what they want, and you have to give it to them. You can't just give them what you want to give them. One thing that's very important too when we talk about the timing of it. So the states are going to care about advance notice.

Christy Y Barger (14:22)

ruffles a lot of feathers because they're there they've signed letters of intent that say we're not going to tell anybody we're not going to disclose anything. So this the statutes will say you know you'll see 30 60 90 days advance notice. So that's very important that some level of advance notice occur. Now you can be vague and a lot of companies will start this way so we'll send a notification letter to the state. Hey ABC company may be making some corporate changes in the near future.

Adam Parks (14:28)

Yeah.

Christy Y Barger (14:50)

We don't know what those changes are yet. They're still being finalized. Discussions are still in play. As soon as we know, we will update you of what the new structure will be. So there's your advance notice. While it's not everything the state wants to know, it's a good, it's the advance notice. You've told them you're doing something. Now the next question is, well, what if it doesn't close? Simple. At that point, you send a letter saying, hey, we decided not to do any corporate changes now. Our licensing structure, our corporate structure stays the same.

Christy Y Barger (15:17)

And so you're out of it. As you work towards the closing, that's when all those details matter. The name, the FEIN, the current, the new ownership once the change occurs. And that determines what you have to submit to the states. So some of the states, it's an amendment process. And let's kind of focus on the licensing and forget about the certificates of authority, because those are pretty easy to update. The licenses, some of it's an amendment process, and some of it you're starting from scratch and you're redoing everything.

Okay.

Joel Blackburn (15:39)

and

Christy Y Barger (15:44)

So for the amendments it's usually obviously an updated org chart. They want to know who the officers are, who the owners are, who the collection managers because sometimes that changes as well. So it's it's usually a multi-level change that's occurring when there's an acquisition. One other thing that I want to throw in and maybe I should have done this a minute ago. Not only if a company has acquired but if you're doing estate planning, if you're doing restructuring within your current

ownership, that's still a change. And so the states have to be advised to that as well. And that kind of gets a lot of people will think, it's the same owners. It doesn't really matter. But in the state's eyes, it really does matter. So a lot of people, know, about this time of year, they'll start doing estate planning for end of, you know, 2025. You've got to know that there's licensing ramifications with that that internal restructuring, even among your existing owners.

Again, it's the same process. Even if they are existing owners now, if they go over certain thresholds, then they may need more information. They may need a fingerprint. They may need the MU-2. So you just really have to talk through it very carefully with a trained professional who does this all the time. You want legal advice. You want counsel involved in this because what may be best for licensing isn't what's best for taxes. So...

your tax provider is involved in this. So it's just a very long conversation. It's not quick. It's not fast. It's not, it can be a long process, but it's so very important in order to keep all your licenses current while you're going through all these changes. You know, the states know this happens. You're not going to shock them when you send them a notification, hey, we may change something, but it's the way you provide that information timely to the states is what makes the process the best for.

Christy Y Barger (17:29)

the purchase, entity, the, I'm sorry, the new owners as well as the old owners. The old owners sometimes will stay on for a little while, maybe in some type of management role. So they're still a control person. they're, it's important for them to do the right thing. One, to make their company, someone want to purchase their company, but also a lot of times they'll go to a different agency and start a new agency. And so their name needs to be, the state needs to think of them as, this was a great licensee.

Now they're going to start a new company. It's easier to do that than if you just kind of don't play by their rules. It happens sometimes. And then it's usually a mess and there's fines involved and it's not fun when it gets to that point. So, you know, following the rules, knowing that all those different levels matter, all the different questions have to be asked and answered. And if you change one thing, this happens a lot too. We'll get way down the conversations and they'll go, wait a minute, now we're going to change this.

Here, I've got to go back up here. We're going through the questions again.

Adam Parks (18:20)

We're starting back at the beginning. Just one more time here.

Christy Y Barger (18:22)

Yeah, yeah,

let's think through this again because it's so very important. You want to do the right thing. The new owner wants to do the right thing. The old owner wants to do the right thing. It's just knowing the process to get it done timely.

Adam Parks (18:34)

We the process for what is the right thing, which I think is interesting the way that you approach it. And that series of questions and identifying whether or not there's actually an entity change here. Now, the second big question that people always have is the timing. Well, it'll be faster if I buy this versus starting over from scratch. And I don't know that that's necessarily the case either, because some of these states kind of roll up their own pace, regardless of, you know, entities.

So talk to me a little bit about, is there any differentiation between the timing or the amount of time it's gonna take to, let's say, update and amend some licenses and even still have to go through some relicensing versus starting from scratch? I'm trying to identify that differentiation.

Christy Y Barger (19:18)

Yeah, absolutely. There is value to buying an entity that's owned by a holding company. So you go in and you don't buy the licensee, you buy the holding company. There is value there. Those certificates of authority at the Secretary of State level, those are easy to be amended. So that's some time saving, some cost savings. So you have those in place. When it comes to the licenses, the amendments are quicker than a brand new license, obviously because the state already knows who the company is.

They've got financials on the company. You're just updating the information of the corporate structure. What's changing the new org chart, the new financials, because those are going to change. So you're updating information the state already has. If you're starting from scratch, obviously there's the whole process. There's the certificate of authority. There's the license. There's getting the fingerprinting. There's getting all the different levels done at the state levels as to what the requirements, their credit reports, all of those things. But

Christy Y Barger (20:08)

Even when you're purchasing a company, here's the big thing that sometimes when I say this, that the call goes silent for a moment. So even if you're purchasing a company and there's some states where we have to relocage you in, you're doing the whole application as if you're brand new. You're doing your fingerprints again. You're doing your background check again. You're answering the the MU2 questions. You're providing your resume. You're providing your driver's license. So it's still the process and it's a timely process.

Joel Blackburn (20:28)

you

Christy Y Barger (20:36)

they will ask is it faster obviously to relicense even if the company is this the company if you're if we're having to relicense an existing company is that faster probably not it's the same process it has to go through all the review steps you know the fingerprinting takes for a while the FBI all that just takes time and so it's a very lengthy process no matter what you do

Adam Parks (21:01)

It's a reasonable answer. No, look.

Christy Y Barger (21:01)

would say again there's a little bit of change there yeah again there's

a little bit of value there but

Adam Parks (21:07)

It's I realize I'm asking some pretty nuanced questions, right? Without a specific entity in front of you without my ability to answer all of the individual questions. I think this is a great conversation to kind of set that guideline of like, this is not really the shortcut that it's cracked up to be or that it's discussed in the marketplace for those that have not actually executed on M&A's. And let's be honest, M&A's don't take five minutes either.

Christy Y Barger (21:10)

Right.

Adam Parks (21:32)

going through the process of acquiring an organization or selling your organization. I've been through it a few times now on both sides and it's definitely not fast. think having a good guidance, like you had mentioned, Corporate Advisory Solutions, Michael Lamb and that process, like their knowledge of going through the process multiple times is basically the same way that I look at you guys and say, all right, well, they go through this all the time.

Christy Y Barger (21:32)

No.

Adam Parks (21:52)

Now, licensing, know, is organized or states have moved towards NMLS. Licensing seems to move maybe a little bit faster than it used to What's a realistic time frame these days?

I want to start a new debt collection agency. How long is it going to take from today when I'm ready to put all of the money in documentation in versus actually being able to operate on a national basis? I realize it's also a loaded question. So I will accept any ones that

Christy Y Barger (22:19)

It is still you want to take that one?

Joel Blackburn (22:20)

Yeah,

it's going to vary a lot by state, like you said. mean, you can get your certificates of authority filed pretty quickly. Within probably a month, you can have all of those all filed and ready to rock. But you've probably got your Texas debt collector bond on the one end where you'll get approved from the state in a couple of weeks for that one.

On the other end of the spectrum, you've got some of your more difficult states like Nevada, California, where there's just a lot more involved in the application process. There's going to be a lot more back and forth. both of those are on NMLS. And I wouldn't say that the fact that they are on NMLS really doesn't improve the time. I think one of the things, while NMLS has helped in some ways,

there's just more you have to think about because if you're updating something, you're posting something in one state, that's a connected network where they are aware of that. So you have to make sure that your information is consistent from state to state because they will, if you are updating something in your ownership structure, you can't do it in one place. You have to make sure that it is consistent across all the states. you can probably have the bulk of your licensing done

I would say six months, if all goes well, with perhaps a couple of exceptions. there are states, like we went to the NMLS conference here in Atlanta back in February, and one of the questions that was asked was, so of all the applications you get, how many do you accept the first time? And I'm sure you can guess, the answer was zero.

Adam Parks (23:59)

I say like 8%. I

Christy Y Barger (24:01)

Something low.

Adam Parks (24:01)

figured it was low but zero. Wow.

Joel Blackburn (24:01)

Zero percent.

So even with some of the regulators, even if you cross all your T's dot all your I's, are going to initiate a back and forth with the applicant, even if everything was done correctly the first time. So that's where we do everything on our end to make sure that for what we know from the regulators, this is what they want. But there's always going to be some back and forth that

Nobody has any control.

Adam Parks (24:31)

Yeah, well, bureaucracy has to prove its value. bureaucracy requires, you know, proof of life, and being able to show that they're asking these questions, you know, or I realize that there's, you know, different states are going to take a different timeline in order to execute and to get those things done, and that the application of NMLS technology is not really speeding up

the process so much, but what advice would you have for someone who's preparing to start a new agency? What do they need to start preparing before they even reach out to you guys or are you holding their hand to navigate the entire process?

Christy Y Barger (25:09)

So that's one thing that I've really enjoyed helping new companies with is talking through that corporate structure. It is so very important to get it right the first time. Obviously you can change anything down the road, but it's a process, it's fees, it's time, it's a process. So I really enjoy helping companies understand, hey, let's form a company. Hey, let's have it owned by a holding company instead of individuals. Let's look at that. These are your minimum net worth requirements. This is how you need to get to those.

Here's what your financials are going to look like when you submit them to the state. They're probably going to come back and ask you these three questions because we've done it so long. So having that advance notice so they can start preparing helps with those processing times. You know there's levels of review at the state and so you may go through the first level and get a checkmark you're good to go. But once you get to the financial review those regulators are going to come back and have questions.

We can't answer those questions because it's about their internal financials, but we can help guide them towards this is probably what they're gonna ask. Another thing that we kind of see is some of the states still have a board that actually reviews the applications. that's gonna, you can't do anything about that because the board meets three times a year or once a month or whatever. just going in the right way.

Putting the extra time in on the front end. I know everybody wants to be licensed yesterday. We have so many of those calls and it's so disheartening when we tell them that's not gonna happen. But going in the correct way, knowing what's needed, having that structure prepared the way that the best way for your exit strategy in the future, giving the states what they want, knowing that we've done it so long, we know what's not on the checklist.

And there's weird things on there where if you have to complete this in blue ink or black, I mean, it's just really, it gets down to weird things. It's so funny sometimes. But you know, staple versus paperclip, that's one of my favorite ones ever. You're just like, okay, we will take that paperclip out. You know, it's just, it's so funny that there's little things like that that are out there. But you know, planning, not making rash decisions just to get your license that you're gonna then end up having to change.

Joel Blackburn (26:56)

stapled versus paper clipped.

Christy Y Barger (27:14)

That's what we enjoy helping people understand and work towards, is doing it the right way the first time. Considering everything, now, future, obviously the states will change some of their requirements and procedures along the way, but there's a good solid foundation of how you should look at licensing a new entity or an entity that you're purchasing and setting it up new.

Adam Parks (27:35)

And having to set it up, mean, because like you said, if you're doing an asset purchase, you're kind of in that position anyway, right? You're going, you're starting from scratch, you're going through this whole process over again, and trying to establish, you know, where you stand. It's interesting, licensing is always one of those, I feel like it was the first big compliance thing before, you know, the before the CFPB was born, and we all started, you know, focusing on compliance, and it became a major business function and call it 2012, 2013.

as that all happened, licensing has been something that's been going on forever. And you guys have been on the cutting edge of it going from, you know, paperclip versus staple to the NMLS being born to that digital aspect of what licensing looks like. And I appreciate the insights on how organizations can prepare themselves for what they're going to go through the understanding of the administrative.

commitment that they're gonna have to have in place in order to actually execute on these things in a reasonable period of time. And although, kind of a curiosity question for me, what do you find is burning more time in the application process? Waiting for the states or waiting for the organization to respond to the requests and organize the information required?

Christy Y Barger (28:52)

Gosh, that's a loaded question.

Adam Parks (28:54)

It's a super loaded question.

Honestly, my guess is that for organizations with dedicated compliance folks internally that have that information organized and prepared to go, it's a lot easier for them. But if they don't have that internal team to manage it and you're waiting on a CEO or president, look, I know I'm the biggest bottleneck in my organization. I'm 100 % aware that I'm the problem. Let's be honest.

Joel Blackburn (29:17)

Yeah

Adam Parks (29:22)

So I'm just curious as to if that's been the experience. it more about waiting for people to kind of get these materials together and go physically, go to your sheriff's office, go get fingerprinted and do the things, or is it more about like, okay, everything's been submitted, now let's start our clocks and we're gonna, know, we'll see a response here in, you know, six to 12 months.

Christy Y Barger (29:42)

So since I've done this so long, I think it's safe to say I've seen people in the industry that have been in the industry. They know what the requirements are going to be. They know what they're going to have to do getting those people. They want to start a new company or make some changes. They have things in place. They know what to get. They know they know when we ask for something weird. We're not just asking for it because we want to know we're asking for it because the state wants to know those pros those projects obviously go a lot faster. Some of the new people coming in they're like what do mean they want to know if

I've ever been married. Why do they want to know my wife's name? Why do they want to know this? So there's a lot of counseling through it. It's a process. That's one thing we always say on the front end. And then our specialists say to you, it's a process. We know it is. We know it's frustrating. But our job is to make it as easy as possible for you. We're going to tell you what we need. We're going to help you understand it. If we need to pull in an attorney to help understand it more, obviously we'll do that. If you need certain things drafted, here's an attorney that can draft those for you.

So guiding them along the way, obviously that takes a little bit of time. Once it gets to the state, it's at the state. There is nothing we can do to speed it up. I have that conversation a lot too. They're like, I have to have this by the end of the month. I'm like, sorry, this is the process. This is how long it's gonna take. I would love for you to have it by the end of the month, but it's just not gonna happen. They're not gonna overlook your fingerprint cards because you need it in a hurry. They're not gonna, you

Joel Blackburn (30:53)

Yeah.

Christy Y Barger (30:58)

waive some of the requirements because you're in a hurry. That's why it's best to do it fully, understand it, think about what you're doing, what you're submitting, make sure you're giving the state what they want. And that's the fastest way to speed up the processing time once it gets to the states. If the states come back and ask for something, you're have to give it to them. It's not it. Nope, sorry, we're not gonna tell you that. Yes, you're gonna have to do that. Yes, yes.

Joel Blackburn (31:01)

Thank

Yeah.

Joel Blackburn (31:20)

And.

Adam Parks (31:20)

You

hire if you want to get licensed, yeah.

Joel Blackburn (31:24)

Well, and in defense of the regulators too, most of the NMLS licenses expire 12-31. And so if you're submitting a new license application towards the end of the year, I mean, they've already got a stack of stuff that they've got to deal with. you know, that's, yours is not going to be the priority. So that's what we tell people is you've got to be realistic with like the load that they are dealing with on their end. And this time of year is going to be better for new applications than say October.

Adam Parks (31:36)

Cooked. Cooked. Yeah.

Christy Y Barger (31:53)

Yeah, and one thing to know is I've attended NACARA, which is the regulator conference a couple of times. I actually spoke last year at it. And it's a great room of people. The regulators want to license the entities. They're not there to make it extremely difficult on you. There's requirements they want to see. There's reasons they want to see these things. And as long as you're working with them, they're going to work with you. They want to give you a license. They want to be able to regulate you and make sure everybody's doing the right thing. They want to keep the bad players out of the

Adam Parks (31:54)

statement.

Christy Y Barger (32:20)

of the space. And so they really want to do the right thing. It's just a process. It takes time no matter what you're doing in any type of licensing. you know in our space there's been some bad actors in the past and that's probably why some of those rules are out there. It's kind of like the warning labels on some of the things around the house that are like, really somebody did that? But yes, exactly.

Adam Parks (32:38)

You want to the Tide Pod? Okay.

Joel Blackburn (32:41)

This

this is hot coffee? Okay.

Christy Y Barger (32:43)

Yes!

Adam Parks (32:44)

That's some really great insight. I think we often overlook how overworked the regulators also are. I can imagine that Wyoming does not have a large staff of licensing folks to help manage the process. And I don't even know if Wyoming requires a license. I'm just using it exemplatory. But different, like the government agencies don't always have the...

the volume of staff needed to process the paperwork. And, you know, I know a lot of people were complaining about California when the license first rolled out and what that was going to look like from a time period perspective. But again, there's only so many resources that can be used to move that train down the tracks. And so I think they're doing the best that they can with the resources and tools that they have available. But the rules are not their rules. The rules came from the legislators for the most part, right, or from a regulatory body and their job is to actually affect

Joel Blackburn (33:29)

Absolutely.

Adam Parks (33:33)

those rules and make it happen, which is frustrating, think, for everybody. It's frustrating for them when they have to put rules in place that maybe they don't agree with. It's frustrating for us that we have to jump through more hoops than we feel is necessary. But like you mentioned, there were bad actors in the space. I'm sure they still are out there somewhere. I sure as hell don't talk to them, but I'm sure that they still exist somewhere, And the recesses of the rocks somewhere. And I think it's important that we all do what we can to protect our industry from

Joel Blackburn (33:33)

Absolutely.

Hahaha

Adam Parks (34:00)

bad players from this type of negativity and focus on what we can do as an industry to continue to grow and improve. But I can't thank you guys enough for coming on and sharing your insights today. This was very insightful for me. You answered a lot of questions that I had personally, and honestly, some misconceptions from conversations that I've either overheard or participated in over the last couple of years about buying companies for the purposes

Joel Blackburn (34:01)

Yes.

Adam Parks (34:24)

of buying licenses. And now I feel like I've got a much better understanding of nothing else. The first three questions that I need to be asking when they start making those statements. And I think the fourth question is probably, you talked to Christy and Joel yet? Because they've got other 25 questions to ask you. But thank you guys for sharing your insights. I really appreciate you.

Joel Blackburn (34:37)

Yeah.

Christy Y Barger (34:40)

Love it, yes.

Joel Blackburn (34:44)

Thanks for having us, Adam. This is joy.

Christy Y Barger (34:44)

We appreciate it, Adam. It was a

great topic, like you said.

Adam Parks (34:47)

I definitely appreciate it. those of you that are watching, if you have additional questions you'd like to ask Christy or Joel, you can ask those on LinkedIn and YouTube and we'll be responding to those. Or if you have additional topics related to licensing, insurance, or really all of the wonderful things that Cornerstone does, you can leave those in the comments below as well. And hopefully I can get Christy and Joel to come back at least one more time to help me continue to create great content for a great industry. But until next time, guys, thank you so much. I look forward to seeing you at the ACA Annual Conference. We can sit down and spend some more time chatting.

Joel Blackburn (35:17)

Great. Thanks, Alan.

Christy Y Barger (35:17)

Absolutely. Take care.

Adam Parks (35:18)

And thank you everybody

for watching. appreciate your time and attention today. We'll see you all again soon. Bye.