US Senators Sherrod Brown and Marco Rubio have called for a ban on confessions of judgement a tactic predatory lenders use to make borrowers forfeit the right to defend themselves in court according to a report from Bloomberg Brown a Democrat on the Senate Banking Committee from Ohio and Rubio a Republican from Florida said they will submit the bill on Thursday The practice has crippled small businesses across the country The practice involves financial firms offering small businesses loans but making them sign confessions that will let lenders legally take assets from the businesses after they accuse them of non-payment We started getting calls from small businesses that this just hit them from nowhere it couldnt be real it seemed so far-fetched Brown said in an interview We think it should stop Brown said he read articles in Bloomberg that outlined the practice where borrowers said lenders lied and forged documents about how much money they were owed Because they signed the confessions businesses had no legal recourse We are taking another step in protecting Americas small businesses the foundation of our economy by preserving the right of a business to be heard in the court of law before a potential credit default Rubio said in a statement The companies that force the use of confessions are called merchant cash advance companies Since the financial crisis banks have not been giving small businesses as many loans The companies offer fast cash to smaller businesses like restaurants and truck drivers However they charge exorbitant interest rates sometimes topping 400 percent annualized The confessions are usually filed in New York State regardless of the origin of the loan The cash advance outfits have won 25 000 judgements since 2012 a number that equals about 15 billion New Yorks attorney general started investigating the practice on Dec 3 LATEST INSIGHTS Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation thats reshaping the payments and commerce ecosystem Check out the latest PYMNTS report on driving gas pump payments to the C-Store