U.S. Rep. Al Lawson, D-Fla., scored a win on Capitol Hill as his “Small Business Fair Debt Collection Protection Act” cleared a key committee.
Earlier this month, Lawson brought out the bill which :protects small businesses from harassment by third-party debt collectors” and “extends protections under the Fair Debt Collection Practices Act (FDCPA) to small businesses with loans or obligations that are less than $5 million so that debt collectors have guardrails on what they can do to collect these debts.” At the end of last week, Lawson got his bill through the U.S. House Financial Services Committee on a 31-23 vote.
The congressman weighed in on his bill on Monday.
“This bill encourages entrepreneurism, and allows small business owners to have similar protections as consumers when having to deal with debt collectors,” Lawson said. “Small businesses are the backbone of our economy, employing 58.9 million workers, and most are doing well. But in those instances when they fall behind on meeting their obligations, they should be shown the same respect and dignity as consumers.”
The congressman’s office offered the rationale to why he introduced the bill.
“Currently, small business loan borrowers do not have the same protections individual consumers have under federal law. Small business owners often times place their personal finances as capital to start and expand their businesses. Small business owners often apply for credit using their personal credit yet they don’t receive the same protections as individual consumers. By expanding the protections that currently exist for consumers to small business owners, these businesses are more likely to succeed. These protections are especially important to women and minority small business owners who are particularly vulnerable to predatory practices because they are less likely than other small business owners to have the capital resources and network supports necessary to protect themselves against abusive collectors,” Lawson’s office noted.
The bill has the support of the Main Street Alliance, the Responsible Business Lending Coalition and the Small Business Majority.
U.S. Rep. Emanuel Cleaver, D-Mo., is the only co-sponsor of the bill. So far, there is no counterpart over in the U.S. Senate.
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