Sens. Sherrod Brown (D-OH) and Marco Rubio (R-FL) reintroduced a measure designed to protect small businesses from predatory lenders.
The Small Business Lending Fairness Act codifies the Federal Trade Commission’s (FTC) 1985 ban on confessions of judgment in law in consumer loan contracts, expanding the ban to provide protections to business borrowers.
The lawmakers maintain confessions of judgment require a borrower to surrender their court rights before obtaining a loan – allowing predatory lenders to seize the borrower’s assets without warning to pay off the debt.
“When we let financial predators harm hard-working Americans through scams like confessions of judgment, we undermine the dignity of work,” Brown, chairman of the Senate Committee on Banking, Housing and Urban Affairs, said. “This bipartisan bill would protect consumers and small business owners from predatory lenders that use legal tricks to strip away their hard-earned money.”
Rubio said the bill takes another step toward protecting the nation’s small businesses, which he said is the foundation of the country’s economy, by preserving the right of a business to be heard in a court of law before a potential credit default.
“I remain committed to protecting our small businesses from predatory, out-of-state lenders, and I urge my colleagues to join me in this effort,” he said.
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