Bill Overview
Title: Small Business Fair Debt Collection Protection Act
Description: This bill applies consumer debt collection protections to small businesses, including protections regarding debt collection methods and third-party debt collection.
Sponsors: Rep. Lawson, Al, Jr. [D-FL-5]
Target Audience
Population: Small business owners
Estimated Size: 33200000
- The bill targets small businesses by extending consumer debt collection protections specifically to them.
- Small businesses often face challenges in managing debts and interactions with debt collectors, making them a direct beneficiary of this legislation.
- Small businesses represent a significant portion of the global economic landscape, operating in various industries such as retail, food services, and more.
- The bill protects small businesses from aggressive debt collection practices, potentially reducing stress and fostering a healthier business environment.
Reasoning
- The policy targets small businesses, which are a major part of the US economy, comprising approximately 33.2 million businesses. They face unique challenges, especially regarding debt collection practices. The policy aims to protect these entities and potentially enhance their longevity and success, thus benefiting the broader economy.
- However, only a subset of small businesses will experience a substantial impact depending on their current financial health and their interactions with debt collectors. This differentiation is crucial given the budget limitations, necessitating focused application where it's needed most.
- The budget constraints mean the policy's initial implementation might cover a modest fraction of all small businesses. This requires careful targeting and scaling over time as resources increase.
- Wellbeing improvements might not be immediate, as legal and procedural changes take time to implement effectively. Initial benefits may manifest in reduced financial stress and improved business operation conditions.
Simulated Interviews
Owner of a small retail store (Buffalo, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- This policy could be a lifesaver during tough times.
- Debt collectors can sometimes make it hard to focus on business growth because they are so aggressive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 7 |
Tech start-up founder (Austin, TX)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- My business is not heavily reliant on loans yet, so I may not feel the impact immediately.
- It's a good safety net for the future though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Owner of a small organic farm (Seattle, WA)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I'm cautious and optimistic. This could reduce the financial strain from unexpected weather damage impacting crop yield that leads to debt.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Freelance graphic designer (San Francisco, CA)
Age: 29 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I don't deal much with traditional debt collectors, but it's reassuring to know there's some protection if needed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Owner of a small automotive repair shop (Detroit, MI)
Age: 63 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- Aggressive debt collection has been a big issue for my business.
- I hope this policy can give me some breathing room to stabilize finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Owner of a fitness studio (Atlanta, GA)
Age: 37 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Such measures could assist in better managing finances, especially after the pandemic.
- Protection against abrupt financial disruptions is crucial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Restaurant owner (Omaha, NE)
Age: 54 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Fair debt collection could mean less stress and more focus on improving customer experience.
- It's vital for feeling secure in expanding the business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 6 |
Home-based craft business owner (Dallas, TX)
Age: 41 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- My debts aren't huge, but having more support around fair collection helps keep stress levels manageable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Construction contractor (Raleigh, NC)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 6/20
Statement of Opinion:
- Debt collectors can be burdensome, so this policy seems like a necessary protection.
- May help stabilize finances during low project periods.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Owner of a digital marketing agency (Chicago, IL)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I appreciate the effort to place checks on collection practices.
- It could mean I have more room to innovate and take financial risks without fear of aggressive collectors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Cost Estimates
Year 1: $50000000 (Low: $25000000, High: $75000000)
Year 2: $45000000 (Low: $20000000, High: $70000000)
Year 3: $40000000 (Low: $15000000, High: $65000000)
Year 5: $35000000 (Low: $15000000, High: $55000000)
Year 10: $30000000 (Low: $10000000, High: $50000000)
Year 100: $10000000 (Low: $5000000, High: $15000000)
Key Considerations
- Enforcement of new regulatory measures will require initial financial outlay and ongoing operational costs.
- Potential legal challenges may arise, influencing the overall fiscal impact.
- The administrative burden on small businesses may initially increase during the initial phase of adaptation to new regulations.