Sen. Menendez, Rep. Velázquez Introduce Bicameral Bill to Stop Predatory Small Business Financing
- louis4952
- Jun 14, 2023
- 2 min read
BANKING.SENATE.GOV June 15, 2023
WASHINGTON, D.C.– U.S. Senator Robert Menendez (D-N.J.) and Congresswoman Nydia M. Velázquez (D-N.Y.-07), the Ranking Member of the House Small Business Committee, today introduced the bicameral Small Business Financing Disclosure Act. The bill aims to protect small business borrowers from predatory lenders and small business financing options carrying unfair terms and conditions and would ensure safeguards already required in consumer lending, through the Truth in Lending Act. The bill would bolster the role of the Consumer Financial Protection Bureau (CFPB) in policing small business financing and bring enhanced transparency to small commercial originations.
“Predatory lenders often attempt to prey on small businesses in need, which is why we must have greater transparency around their lending practices and the loans they make available to small business borrowers. We must create an economy where hard-working Americans and small businesses can thrive,”said Sen. Menendez. “I am proud to be leading this legislation with Congresswoman Velázquez to help protect the more than 950,000 small businesses that call New Jersey home and the millions more that are the backbone of our nation’s economy.”
"Small businesses are the lifeblood of the American economy. But for too long, predatory lenders have taken advantage of businesses in need of capital by offering loans and similar products with unclear terms and exorbitant interest rates,”said Ranking MemberVelázquez. “This legislation is a critical step in extending many consumer lending protections to small firms, bringing needed transparency to small business credit markets and ensuring entrepreneurs understand their obligations and rights when they sign up for credit."
“We have a responsibility to ensure that small business owners have access to capital on reasonable terms. This is particularly important for entrepreneurs and small business owners from minority and underserved communities who have historically faced barriers to receiving financing,” said Sen. Ben Cardin (D-MD), Chair of the Senate Committee on Small Business and Entrepreneurship. “Many small businesses do not have the necessary resources to make determinations on financing, leading them to search for alternatives. This legislation simply ensures that small business owners understand the terms of the capital they receive in an effort to bring much needed transparency into this market.”
“It’s outrageous that unscrupulous lenders continue to rip off small business owners with unfair predatory loans,”said Sen. Ron Wyden (D-OR), Chair of the Senate Committee on Finance. “Small business owners in Oregon and nationwide deserve transparency when it comes to small commercial loans and this bill would add necessary safeguards to protect borrowers and allow the small business economy to flourish.”