The House Committee on Financial Services passed two important bills on November 14, 2019, which, if passed by the full House, would amend the federal Fair Debt Collection Practices Act.
These bills would provide much needed protections for more than 30 million U.S. small businesses who are routinely preyed upon by unscrupulous lenders and aggressive debt collectors.
The Small Business Fair Debt Collection Protection Act (H.R. 5013), aims to apply the protections currently afforded to consumers by the Fair Debt Collection Practices Act (FDCPA) to certain small business debt. If passed, it would require the Consumer Financial Protection Bureau (CFPB) to redefine “small businesses” so that consumer protections would extend to them as well. The bill was sponsored by Representative Alfred Lawson Jr (D-FL).
The Small Business Lending Fairness Act (H.R. 3490), also passed by the same margin. This bill proposes to restrict the use of Confessions of Judgment in small business loans. The practice was recently banned in New York - where it was most widely abused - and if passed, the measure will expand protection small businesses in all 50 states. This bill was sponsored by Representative Nydia M. Velazquez (D-NY).
Both bills passed through Committee by a vote of 31-23. Please support passage of these bills by reaching out to your Representative, letting him/her know you support the passage of both bills that will provide additional protections small businesses need. Click here to find your representative. For more information, check out our page on small business debt relief.