A funny thing happened on the way to bill passage. Congress forgot all about small business and none of the credit card predatory lending limits apply to small business.
The House just passed the Credit Cardholders Bill of Rights, which restricts some aggressive tactics by credit card companies, like arbitrary rate changes, applying payments in a way that maximizes interest charges, and double-cycle billing. But the bill as written doesn’t apply to small business credit cards, even though such cards are personally guaranteed and function exactly the same way consumer credit cards do. An amendment that would have made this change explicitly apply to cards issued to businesses with fewer than 500 employees did not make it out of committee yesterday.
Small businesses so often use credit cards to manage cash flow and buy inventory. Small businesses also generate a hell of a lot of jobs. So why would small businesses, who need consistent credit terms most of all, be left out of receiving any protection?
The bill, H.R.627, Title: To amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes, passed the house and is now moving to the Senate.
So, what happened to the amendment to include small businesses with 500 employees are less as protected against these predatory credit card practices?
I searched the congressional record and it appears the amendment was not even allowed on the floor during debate proceedings. I also searched through the legislation text and amendments looking for some alternative that would protect small businesses. Nothing I could find popped out. I also could not find any press information from both Congress representatives Lowey and Abercrombie. Strange isn't it?
Here is a credit card bill of rights analysis post by consumer credit watchdog Credit Slips, but there is scant information on small businesses and credit cards. Ya know, we need jobs, not some sort of shark fish bowl gobbling up small businesses through horrific credit terms.