Congress Introduces New Restrictive Small Business Financing Bill

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US CapitolA new bill introduced by Rep. Nydia M. Velázquez, the Chairwoman of the House Small Business Committee, and Senator Robert Menendez (D-NJ), hopes to “stop predatory small business loans” by applying broad consumer protections to small business borrowers nationwide.

This would be done by including small businesses as a covered party under the already existing Truth in Lending Act (TILA).

The proposal, if successful, would arguably become more restrictive than New York’s recently passed commercial financing disclosure law.

Among the supporters of the bill are LendingClub and Funding Circle. No republican members of congress are listed among the sponsors in the official announcement.

The bill is similar to one introduced last year that failed to advance, the Small Business Lending Disclosure and Broker Regulation Act of 2020. That bill never made it out of the House Financial Services Committee. The makeup of Congress now, however, is different than it was last year.

Last modified: November 19, 2021
Sean Murray

Category: Regulation

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