Bill Introduced in Congress to Expand FDCPA to Cover Small Businesses

A bill has been introduced in Congress that would expand the Fair Debt Collection Practices Act to cover small business debts in order to protect those companies from “harassment” by third-party debt collectors, according to the bill’s sponsor.

H.R. 6814, the Small Business Fair Debt Collection Practices Act, was introduced yesterday by Rep. Al Lawson [D-Fla.]. It has been referred to the House Financial Services Committee for its consideration.

The provisions of the bill would apply to debts collected from businesses with loans or obligations of less than $5 million. Details of how that would be determined would hopefully be included in the text of the bill, which was not immediately available.

“This bill promotes entrepreneurism and allows small business owners to have equivalent protections as consumers when dealing with debt collectors,” Rep. Lawson said, in a statement. “Small businesses are the backbone of our economy, and many are doing well, but in those occurrences when they fall behind on meeting their obligations, they should be given the same level of grace as consumers.”

Rep. Lawson noted that many small businesses are started up using the personal finances or credit of individuals who are behind the operation. Those individuals do not receive the same protection as business owners as they do when the are consumers, Rep. Lawson noted. Those protections are “especially important” to women and minority business owners “who are particularly vulnerable to predatory practices because they are less likely” to have “the capital resources and network supports necessary to protect themselves against abusive collectors,” Rep. Lawson said.

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