Predatory Lending Tactics Spur House Lawmakers to Propose a Ban
- Representatives introduce bill barring confessions of judgment
- Legislation mirrors proposal in Senate earlier this month
The U.S. Capitol building stands in Washington, D.C., U.S.
Photographer: Al Drago/BloombergThis article is for subscribers only.
U.S. Representatives Nydia Velazquez and Roger Marshall called for a ban on a legal tactic that predatory lenders use to seize money from small businesses, matching a bipartisan bill introduced in the Senate earlier this month.
Velazquez, a Democrat from New York, and Marshall, a Kansas Republican, introduced legislation that would ban confessions of judgment, legal documents that many financial firms offering quick money require customers to sign to get loans. By signing, the borrowers forfeit their right to defend themselves in court, allowing lenders to seize their assets before they know what happened.