NAFA NFS Checks

Dear Wild Fur Shipper;


In my letter of October 1st, I neglected to deliver a clear message to the many trappers who had prompt payments from our August sale returned NSF. Once again, I apologize. This point definitely requires more explanation and more importantly, information on the repayment plan.

As we approached the September 17 Prompt Date for our August 2019 Auction, we were finalizing the details to transition from our current banking syndicate (“Bank”), to another lender group. At that time, there was a clear expectation on our part that our Bank would honor all prompt payments as the vast majority of these funds had already been paid on September 17th via electronic means. However, 2 days later, the Bank, unexpectedly and without any warning, decided to reverse course and immediately reject any further such check payments by returning marked NSF.

It appears that the Bank took this action as a means to put pressure on both NAFA and the new financial lender to close this refinancing deal more quickly. In our view, this was an unwarranted and unnecessary action by the Bank, given that the new lender had, just that very day (September 19th), credit approved its deal with NAFA and was ready to proceed with putting this new financing in place.

As I stated in the October 1 letter, we have every reason to expect that the transition to the new lender will be finalized around the middle of this month. After this is completed, we will reissue checks for those that were returned NSF along with an additional sum designed to cover your NSF fees. If you have not yet deposited your check, please hold onto it and we will advise you when to cash it.

We expect that all outstanding payments will be cleared up by the end of October.

Again, I am immensely sorry for this delay in getting you your payment for the furs that you entrusted us with in good faith. I can only say that NAFA will honour our commitments to you and will work hard to regain your trust as your fur marketing company.

For your information, we have revised our selling schedule for 2020, which is outlined below.



Sincerely,


Doug Lawson
President & CEO

Ttt

We need NAFA! Hope this clears things up with those involved.

This whole bad check and bank business with NAFA reeks of some sort of animal rights crusading banker to take down the fur trade. Scatter the market and hope it never recovers.

That's my conspiracy theory anyways.....

I still don't understand the financing why is the hard currency that the buyers pay financed??? That is supposedly why there is a lag between buyers check pay prompt date and release of goods and another delay between that and us being paid. How did this go wrong, please explain???? I could see if there was mass hold over but their clearances are according to them near 100% Unless NAFA is spending your fur check before your furs sold... Conspiracy or bad finance?

But, I also agree it would be a tragedy to lose NAFA we need both NAFA and FHA to keep a balance with competition and also international support for fur.

What is worse than us consigners losing a few skins how about buyer confidence? They plop down hundreds of thousands if not more and wait for a month... What happens if NAFA slams its doors and goes into bankruptcy during that time... I can't even imagine. Who gets paid first then the bank or the clientele? I'm thinking the bank they always win even if they lose they get bailed out by taxpayers but us... We tow the line and sink w/ the ship.

I thinks it's clear what happened if you read the letter.

I just cant help but feel NAFA is putting the blame elsewhere.

I read the letter they changed banks but why was my fur check financed in the first place?... I can't stomach the lender part? who has dibbs on my furs/ money?

There you go Sniper. I'm not sure either way and have no dog in the fight but there's two sides to every story and usually the truth lies somewhere between the two.

~ADC~

My jist is this a bank doesn't bounce a check if there is money in the account. Unless you're expecting to use their overdraft and they decided enough overdraft and cut them off...

Will be interesting when NAFA becomes the place to sell coon or whatever,how many will climb back on board.

I get the "neglected to deliver a clear message" part.

Rat, many are not jumping ship, just concerned with what is going on.

Gib You say to hold on to your check if you have not cashed it . I have not cashed mine yet , Now are they going to issue me a new one or am i supposed to try and cash the one i have at a latter date ?

The timming coincides perfectly with when many of the worlds largest banks signed onto the UN "s principles of responsible banking agreement . These banks agree to divest from businesses that are deemed hard on the environment (politically incorrect) and lead (push )borrowers to a greener business plan .This agreement is being touted as being against fossil fuels but it covers everything from meat industry ,big ag to affordable housing .The banks that signed onto this control 1/3 of the worlds credit . They are agreeing to open their portfolios for inspection to their peers (the other signatory banks) to remain signatory .

I would be certain that they are doing things in a way to inflict maximum damage to the businesses they have deemed bad because they feel they have the moral high ground How often does a corporate banker say that.

Bigfoot why was my check financed

A bank can decide to stop lending but not withhold your checking account balance unless you used it for collateral?

Financing doesn't mean a loan was involved.it could but the terms aren't the same.

Smart business move to get off board when nafa is not the place to sell. Irregardless of what trappers do, 90 plus percent of nafa's revenues comes from ranch mink.

That ranch mink revenue is dropping like a rock now. Nafa needs all the wild fur they can get to help stay afloat.

It just means they quit handling their money . NO MORE TRANSFERS GET YOUR MONEY OUT OF OUR BANK TODAY. Just because it might be illegal banking pratices in the USA does not mean that it is a prosecutable offense in international banking law. IM not going to speculate on NAFA s solvency .

If this is why this Bank cut ties with North American then we should all be concerned about this agreement.I mean who's deciding what businesses are hard on the environment, or even what constitutes hard on the environment. There's a very real possibility that one third of the banks in the world just decided that our industry is bad and they wont handle the money .If that is the case just imagine what this will do to the little businesses like tanneries and furriers or the international Brokers that buy and sell fur around the world

I think nafa would benefit more from a continuous supply of ranch mink.

The one point that hasn’t been mentioned is that not all buyers pay for their purchases in full by prompt date. NAFA has a provision in their buyer agreement as to payment options. I don’t have all the details in front of me but I think it is that at least a 35% deposit is required by prompt date. Then they have additional time to pay the balance. During this time, NAFA charges the buyer interest on the unpaid balance. The buyer is not able to receive the goods until they are paid for in full. NAFA holds them as collateral.

Also, once in a while a buyer never pays for the goods he bought. NAFA charges him interest (or attempts to charge him interest) but eventually NAFA takes possession of the goods and reoffers them at the next auction. They usually sell the goods for what the going price is, so that they can recoup some, if not all, of their money. If the market has gone down, the goods some times bring less than they originally sold for. NAFA takes the loss. Needless to say, this buyer is not welcome back.

Shippers get paid in full on prompt date. They get paid for everything that sold no matter if NAFA has been paid or not.

This is where the banks come in. NAFA borrows money from them to pay the shippers even if their sold goods are not paid for in full.

Say a buyer spends $100,000.00 at the sale. He makes the minimum required payment of $35,000.00 and finances the rest with NAFA. That leaves NAFA with $65,000.00 to come up with on prompt date. That may not seems like a lot of money in the big NAFA picture. But suppose 10 buyers to that. Now we are looking at $1,000,000.00 in sales that NAFA has to pay for but they only have $350,000.00 to work with. Where does the other $650,000.00 come from?? A bank of course.

I don’t know the exact numbers but the number of purchases not paid for in full by prompt date is significant enough that a bank needs to be involved so that all shipper accounts are paid for in full on prompt date.

Hopefully this clarifies the situation a bit more. If any of you are still confused, please feel free to ask questions and I will try to explain further.

Note - I am NOT a NAFA employee. I have been buying and selling at NAFA since the mid1980s and have a very good understanding of how the system works.

Thank you, wissmiss! Your explanation helps quite a bit.

Id like to know which bank did this to NAFA. there are not many banks up here and id really like to make sure i don't do business with them.

Wissmiss explained the situation well. This isn’t a case of the bank being antifur or some other conspiracy. This is the same bank that provided a $10 million line of credit before the lady sale.

From what I read, the original bank was unhappy with the credit risk and asked NAFA to find another bank. To expedite the search, the bank shut off NAFA’s line of credit, bouncing checks.

CIBC is the bank listed on the checks

Wiss Miss, Anybody taking financing at NAFA for their purchased furs is a fool ( my opinion) their rates are insane. Why would said party not get lower rate financing before the sale? Which tells me that the people they are lending to are a high credit risk, hence the high rate if that really is the new trend to default on purchases, which I think isn't that case? Raise the upfront deposit, put more into reserves to cover the spread. Seems a sweet deal actually if the customer forfeited the furs back... I absolutely love it when a customer does a pay plan and fails to follow thru and forfeits the money and I keep the merchandise... It's like pennys from heaven... But this creative financing is a fire breathing dragon and has burned their reputation and sent confidence in the toilet from what I can see. I'm pretty sure you must have been at the 2013 Feb sale? The obscene amount of money flowing should have been enough to solidify their position until the next century, but that isn't the case is it, still muddy waters to me...

Here is a true story around 2010 I believe... Young couple has $40,000 their life savings and all their wedding gift monies to buy a manufactured home they go to this factory in Canada they've been around a long time... Better deal, bigger home, pays cash, waits for delivery, no house, calls factory, no body answers, panic sets in, the factory has closed, the house never built, get a lawyer spend another $10,000 until lawyer says finally your throwing good money after bad... Story ends. Young newly wed couple out $50,000 they have to live with their parents while resaving for a down payment. Worse case scenario but it does happen and when it does there is no loyalty to anybody we all go under the bus.

CIBC Bank is listed as signatory to the agreement

Many of the buyers at NAFA are not American or Canadian. I’m willing to bet at least 75% of the invoices NAFA issues are to customers/addresses in countries other than the US or Canada. Do you know what financing options there are in Hong Kong or Greece or Russia? Perhaps NAFA financing is a better option.

If a buyer were getting their financing from a different source than NAFA, then their goods would be paid for in full and they would be able to clear them (have them shipped).

I am quite sure that any one who is financing through NAFA has a good reason to do so.

Thank Wissmiss for all your help and patient explanations. Good to hear it from someone who has dealt with Nafa for years and has first hand information.

It does not take much to scroll through a catalog with a calculator to realize that a lot of money is involved and 89% (for wild fur) of that money is paid out on prompt date. NAFA manages a lot of money for sure but only get to keep a small percentage of what they handle.

Nafa pockets more than 11 percent on a sale.

QBD, are you serious? 11% commission on a product they don't actually produce is a buisinessman's dream.
Sure, there is overhead and promotional expenses, but 11% is approaching the Holy Grail.

11% is just the sellers fee. Seller also pays drumming on long hair fur and CITES fees where applicable.

Buyer pays 6.5% (I think) plus a per pelt commission plus a per pelt packing fee.

Depending on hammer price, percent NAFA collects is probably in the 25-30% range. Maybe higher on Section III goods.

Yes because they have charges for buyers to but the catalog price for wild fur, 89% is paid out on prompt date for every lot that sold. Not familiar with the ranch fur side.

Even with the buyer fees, the amount NAFA keeps is still a small percentage of the total selling price. And all of their expenses and profit has to come out of the percentage they keep.

Then don't float loans to shady customers... Why is Nafa in the banking business? Stick w/ hammering fur and collecting fees/ commission to folks that can actually afford it.... I know my limits, I've seen idiots bidding and they should throw them out of the auction chamber but they don't because they are greedy... Greed and money is a deal w/ the devil... But has anybody seen the actual #'s... Not accusing but the CEO and President just jumped ship in August... Coincidence?

NAFA doesn’t float loans to shady customers. They work with reliable buyers to ensure they can get the goods they need.

I didn’t realize the CEO and President “jumped ship” in August. Herman Jansen and Michael Menghar retired earlier this year. I don’t consider that “ jumping ship “. Folks retire all the time.

Catcollector - it seems to me that you don’t really want an answer. You just want to argue and get folks riled up. I sure I know who you are in real life..........

Well unless I'm missing something the above does not factor in the 11% commission charged to the seller which would take the figure in this example down to $540,000.00 that NAFA would have to finance in order to be able to pay the trapper. Still if NAFA indeed has been essentially living pay check to pay check, and taking out loans to cover expenses, as a routine, then I am truly surprised.
I thought they lost their butts buying into mink ranches which crashed in value and that caused their financial crisis but maybe not?

If you want to get technical, some shippers only pay a 9% commission.

Borrowing money from a bank to pay shippers is nothing new. Been happening for years and years and years.

The devil is in the details, no?
And I am indeed surprised re the borrowing to cover payments.

I see what you are saying., if the bank pulls the plug, game over?

Wiss Miss, Yes I would like an answer. But that fact is only senior leadership at NAFA knows this and all we do is speculate and I don't agree w/ your speculation and you think I'm off base. It really doesn't matter to me anymore... Isn't worth the time or effort and my skin in this is minimal at this point. So I will leave you w/ your opinions and keep mine to myself. Have a wonderful day and yes you are an asset to this forum thank you for your commentary...

yep

Yes.

livestock auctions are regulated by the Packers and Stockyards Act protecting sellers aka p&s

we should start a F&S Furs and skunks

I did not know that buyers at sale, don't pay for all the goods an only partial payment, nafa finances the rest ? I never did understand all the buyers transactions an oversea stuff, I only up on seller or shipper and an then I don't know alot, I pay 9 per cent commision as a shipper, there could be more stuff going on then knowen , with ranch fur trouble

Some buyers pay their entire bill by prompt date. Some don’t. I have no idea how many are in each group.

NAFA pays all shippers for everything they sell on prompt date. The money has to come from some where.

There are a lot of things about operating procedures at NAFA that many shippers don’t know about. I’m talking about how the sale operates, not any under the table stuff. The Conditions of Sale for buyers is 2 pages of fine print. The fine print is both literally and figuratively speaking. It is published in every NAFA catalog.. I would be happy to mail a copy to any one what would like to take a look.

Wissmiss,
There you go again bring facts into a good Trapperman debate. Dontcha know those just get in the way of rumors, lies, speculation and innuendo?

I thought the buyer condition of sale changes for every sale? Like the 0 down free storage sale?

And who can forget, the no limit sales?

The standard Conditions of Sale are always the same in the fine print.

On occasion NAFA offers special promotions. Like in 2016, if you bought at least 10,000 rats or coon, you got free storagebfor 2 years and you didn’t pay packing and handling fees if you paid in full by prompt date. That was a one time offer.

All the other basics stay the same.

Buyer side commissions don't change?

Buyer side commissions occasionally change, usually at the start of a new selling season. They are announced separately and the specific commissions are not included in the Conditions of Sale.

The C of S is a bunch of legal mumbo jumbo. The part about commissions states something generic like “buyer will be responsible for all fees accessed by NAFA. These fees will be announced prior to each sale”. Or something like that. Actual numbers are not mentioned.

Wonder how much is bought by speculaters without actual orders, an keep in storage until later date with hopes of higher prices. Or how much is in storage by speculaters

Centuries. At every level.
When markets are good, the large local buyers are operating on borrowed money. They pay up front then wait to get their return HOPEFULLY at a profit. It is speculative in nature (anything in the fur business large scale is considered highly speculative) and the money rates reflect that. I realize that at current prices that a buyer could accumulate a large collection backed by a social security check, but that isn't always the case.lol.

The large suppliers of any part of the industry need credit to finance what they think they will need for business and then hope that business comes. If not their investment may set for years awaiting a return. Boxes of traps, baits, cage wire, feed, etc. Sometimes in desperation, hope, blind faith, stupidity, excitement or? they will extend credit to an entity (i.e. a new to the business lure maker with a hot product), hoping it will produce a return in sales to reward them. There have been several people/businesses all but disappear in the last few years because their hopeful speculation didn't pay off. People/businesses with good products.

When NAFA came into existence they bought/accumulated some of the assets of the old, original HBC to which they claim ancestry. This would be the Canada and New York operations, as HBC was a global, multi-faceted company with separate fur divisions in several locations. I suppose if you are using the same stapler and same logo you can make the claim you're the same, but that doesn't make it the "same business." A recent example is Redfield: Redfield-Oregon is NOT the same as Redfield-Denver by any measure. Moot point. When NAFA formed they were heavily dependent on the wild fur trade. The first few years they lost millions in the market. Skin prices were in free-fall, markets were closing, fashions were changing, speculators were fleeing the fire, investors/financiers were calling in debt, banks were saying "no more." From the other direction, mink ranches went out of business by the hundreds, trappers hung up their traps, fox "ranches" closed by the thousands. $1.50 coon and $20 ranch mink averages. In this mess, NAFA to their credit tried to build a business. While many were looking for a way out, NAFA was looking for markets, for example the Greece-to-Russia connection, China & some that didn't pan out. G was in China a few days ago; NAFA was there 30 years ago. At startup, NAFA (called HBC North America or something like that in the beginning) was the smallest of the "big" auctions. This would be around 1989 or 1990 or so. They immediately began trying to expand their offerings (and therefore market-share and income) by appealing to ranchers. Simple business math, not a love/hate thing. As an actual business entity, NAFA has existed for about 30 years. Everything then and now has been leveraged. It is the same across the industry.

I have done business with NAFA, I have not done business with NAFA. I hope NAFA can weather the storm.

FYI Hudson Bay Company still exist as a multinational company.

Yes, mostly retail operations. Also some joint ventures. A dime's edge to what they were.

Okay
So my son has to wait until the end of the month to get his measly $11.03 check for the best red fox he caught. The 18 others are still NS from 2017 season.
Then on top of it the bank charged his account $15 for the retuned check fee.
Is NAFA going to reimburse him his $15?
Bad enough they took out the commissions and all the drumming feeds for all of the fox and dont forget the magazine which is not worth $1 let alone what they charge.

Consider that a very cheap lesson at a young age... I lost all my childhood trapping earnings on a mink farm that I got to work for, for nothing but stink and free labor

My lesson was a crooked local fur buyer in Minnesota, who stole my first fox I ever caught, telling me it was a sammy.

Broken trust is an expensive lesson for the perpetrators.

I called Stoughton on the day my bank called me. I was told NAFA would make it right, including the bank charge, in Oct. There is 19 days left.