On Capitol Hill last week, U.S. Sen. Marco Rubio, R-Fla., focused on small business issues, bringing out a new bill even as he got another one through the U.S. Senate.
Rubio paired up with U.S. Sen. Sherrod Brown, D-Ohio, on Thursday to unveil the “Small Business Fair Lending Act.” The senators insist their bill will “protect small businesses by closing a loophole used by nefarious lenders, and allowing the ability for them to be heard in a court of law" and “bill codifies the Federal Trade Commission’s (FTC) 1985 ban on confessions of judgment, and extends it to include small business borrowers. Confessions of judgment require a borrower to give up his or her rights in court before obtaining a loan, and allows the lender to seize the borrower’s assets, without warning, in order to satisfy the debt.”
Rubio’s office offered the rationale behind the Florida Republican's bill
“Although many states have banned this practice for small business loans and for individuals, borrowers remain exposed due to the current FTC loophole. The Small Business Lending Fairness Act provides small businesses with the same protections consumers already have. Last month, Bloomberg published an in-depth investigative report on this unscrupulous lending tactic, which has allowed creditors to destroy the lives of tens of thousands of borrowers without notice or opportunity for defense,” Rubio’s office noted.
“With this new bill, we are taking another step toward protecting America’s small businesses—the foundation of our economy—by preserving the right of a business to be heard in a court of law before a potential credit default,” Rubio said. “I remain committed to protecting our small businesses, and I hope my colleagues will join me in this effort by passing this bill.”
“When we let financial predators harm hardworking Americans through scams like confessions of judgment, we undermine the dignity of work that makes this country great,” said Brown. “This bipartisan bill ensures that consumers and small business owners benefit from protections that prevent predatory lenders from stripping away their hard earned money under cover of night.”
The bill was sent to the Senate Banking, Housing, and Urban Affairs Committee on Thursday. So far, there is no House counterpart though the bill could resurface next year with the new Congress convening in January.
On another small business bill, Rubio, R-Fla., scored a win last week as the “Spurring Business in Communities Act passed the Senate and is now headed to President Donald Trump’s desk. U.S. Sen. Tammy Baldwin, D-Wis., was a key backer in the Senate while U.S. Rep. Cathy McMorris Rodgers, R-Wash., sponsored the House version and got her bill through that chamber in May. The sponsors insist the bill will allow Small Business Investment Companies (SBICs) to launch in under-licensed states like Florida and Washington.
First set up under the Small Business Investment Act of 1958 with the support of the federal Small Business Administration (SBA), SBICs are mostly based in only a handful of states with the vast majority of them--72 percent--in 10 states. Rubio’s and McMorris Rodgers’ bill would try to change that by exempting SBIC applicants in under-licensed states from full capital requirements. The bill would also make the SBA report to Congress on its efforts in underrepresented states.
“This bill will help to keep and encourage more investment in Florida’s economy, instead of being shoe-horned into Wall Street and Silicon Valley,” said Rubio on Wednesday after his bill cleared the Senate. “I’ll continue to fight for Florida’s economy, and I look forward to the president signing this important bill into law.”
“Small businesses are the engines of our Made in Wisconsin economy and if we increase the amount of startup funding in states like Wisconsin, we can create new jobs and grow our economy,” said Baldwin. “Wisconsin has lagged in business start-up activity and I have worked to change that. This legislation will help carry on Wisconsin’s proud history of entrepreneurship and innovation by providing more support to our small business start-ups, and I’m looking forward to the president signing this bill into law.”
