I 
117TH CONGRESS 
1ST SESSION H. R. 2540 
To amend the Truth in Lending Act to prohibit certain unfair credit practices, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 14, 2021 
Ms. VELA´ZQUEZ (for herself and Mr. SCHNEIDER) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
To amend the Truth in Lending Act to prohibit certain 
unfair credit practices, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Lend-
ing Fairness Act’’. 
SEC. 2. OBLIGOR TRANSACTIONS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by adding 
at the end the following: 
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‘‘§ 140B. Unfair credit practices 
‘‘(a) IN GENERAL.—In connection with the extension 
of credit or creation of debt in or affecting commerce, as 
defined in section 4 of the Federal Trade Commission Act 
(15 U.S.C. 44), including any advance of funds or sale 
or assignment of future income or receivables that may 
or may not be credit, no person may directly or indirectly 
take or receive from another person an obligation that con-
stitutes or contains a cognovit or confession of judgment 
(for purposes other than executory process in the State 
of Louisiana), warrant of attorney, or other waiver of the 
right to notice and the opportunity to be heard in the 
event of suit or process thereon. 
‘‘(b) EXEMPTION.—The exemption in section 104(1) 
shall not apply to this section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) Section 103 of the Truth in Lending Act 
(15 U.S.C. 1602) is amended by adding at the end 
the following: 
‘‘(ff) The term ‘debt’ means any obligation of a per-
son to pay to another person money— 
‘‘(1) regardless of whether such obligation is 
absolute or contingent if the understanding between 
the parties is that any part of the money shall be 
or may be returned; 
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‘‘(2) that includes the right of the person pro-
viding the money to an equitable remedy for breach 
of performance if the breach gives rise to a right to 
payment; and 
‘‘(3) regardless of whether the obligation or 
right to an equitable remedy described in paragraph 
(2) has been reduced to judgment, fixed, contingent, 
matured, unmatured, disputed, undisputed, secured, 
or unsecured.’’. 
(2) Section 130(a) of the Truth in Lending Act 
(15 U.S.C. 1640) is amended by striking ‘‘creditor’’ 
each place the term appears and inserting ‘‘person’’. 
(3) The table of sections in chapter 2 of the 
Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by adding at the end the following: 
‘‘140B. Unfair credit practices.’’. 
Æ 
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