In what may be a response to the Bloomberg article that discussed Merchant Cash Advances or MCAs, Sens. Rubio and Brown introduced federal legislation on December 6, 2018, to prevent confessions of judgments and related instruments. The text of the bill, which is known as the “Small Business Lending Fairness Act,” provides that:
“(a) —In connection with the extension of credit in or affecting commerce, as defined in section 4 of the Federal Trade Commission Act (15 U.S.C. 44), no creditor may directly or indirectly take or receive from a borrower an obligation that constitutes or contains a cognovit or confession of judgment (for purposes other than executory process in the State of Louisiana), warrant of attorney, or other waiver of the right to notice and the opportunity to be heard in the event of suit or process thereon.”.
If you would like more information regarding bankruptcy filings and would like to speak to one of our experienced attorneys, please call (312) 878-6976 or fill out a contact form here.