Increased Credit Card Protections Sought for Small Firms
Entrepreneurship data has consistently shown that a large portion of small businesses rely on credit cards as one of their largest sources of financing (see for example, the Kauffman Firm Survey
). According to the National Small Business Association (NSBA), the number of small businesses reporting that they use credit cards as a source of financing has increased by 18 percent to 59 percent during this financial crisis. The National Federation of Independent Businesses (NFIB) in turn estimates that the number of small business owners using credit cards for business purposes could be as high as 85 percent.
In an effort to address the credit limits and higher interest rates in the current economic environment, the Senate Committee on Small Business and Entrepreneurship
introduced last week an amendment to Credit Cardholder Bill of Rights to apply protections to small business cardholders. The amendment to the Credit CARD Act of 2009 would expand both the underlying legislation and the Truth in Lending Act's credit card provisions to include small businesses with 50 or fewer employees. The amendment would also increase the current credit limit from $25,000 to $50,000 to adjust for inflation and the increasing credit constraints.
The following Senators have cosponsored this amendment: Sens. Landrieu (D- La), Snowe (R-Maine), Benjamin L. Cardin (D-Md), Sharrod Brown (D-Ohio), Jeanne Shaheen (D-N.H.), and Maria Cantwell (D-Wash).