Title: Small Business Lending Fairness Act
Policy area: Finance and Financial Sector

Summary:
Small Business Lending Fairness Act
This bill prohibits as a condition to a loan or extension of credit a confession of judgment or similar agreement. (A confession of judgment is an agreement to a judgment of liability without notice and opportunity to be heard in court in the event of the default of a borrower.)

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1119 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 1119

  To amend the Truth in Lending Act to prohibit certain unfair credit 
                   practices, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 14, 2021

 Mr. Brown (for himself and Mr. Rubio) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Lending Fairness 
Act''.

SEC. 2. OBLIGOR TRANSACTIONS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by adding at the end the following:

``SEC. 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 constitutes 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 person to pay to 
another person money--
            ``(1) regardless of whether the obligation is absolute or 
        contingent if the understanding between the parties is that any 
        part of the money shall be or may be returned;
            ``(2) that includes the right of the person providing 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''.
                                 <all>