Two Senators — Sherrod Brown (D-OH) and Marco Rubio (R-FL) — are introducing a bill today that would ban the use confessions of judgment by predatory lenders. The issue is a provision in some loan agreements for small businesses, in which the lender requires the small-business borrower to agree not to defend themselves in court if they miss a repayment. In some instances, the lenders accuse the borrowers of not paying and seize their assets. But in "interviews and court pleadings, borrowers described lenders who forged documents, lied about how much they were owed or fabricated defaults out of thin air. The borrowers said the consequences were drastic and they had no way to fight back."
The Washington Post reported on the bill is here. Bloomberg has several articles on the problem, including its initial article here and an article on the New York Attorney General's investigation, here.
0 thoughts on “Senate bill aims to ban predatory lenders from using “confessions of judgment””
I thought only a handful of states (Virginia?) still allowed for confession of judgment.