The crux of the law? North Dakota now has the authority to define these alternative finance products as “loans,” putting them under the same regulatory umbrella as traditional lenders. This includes licensing requirements and interest rate caps, up to 36% annually. What’s more, the state’s financial regulator, the Department of Financial Institutions (DFI), has been granted the discretion to classify these products through administrative orders.

The competition in the segment of the industry in which Square Capital competes, now with its bank Square Financial Services, will intensify