A congressional representative from New York introduced a bill today that would extend credit card protections for individuals to small businesses. The legislation comes during the 50th annual National Small Business Week.
Democratic Congresswoman Nita Lowey of the 17th district introduced her “Small Business Credit Card Act of 2013,” saying many small businesses across the country need credit cards to help keep their doors open.
The ranking Democrat on the House Appropriations Committee had previously introduced a similar act, and says it is her understanding that the credit card industry defeated her bill the last go round.
Calls and e-mails to spokespeople at MasterCard and Visa were not returned in time for this broadcast. An American Express spokeswoman says it is company policy to decline comment on any pending legislation. Yet she pointed out that American Express, in general terms, views small businesses as vital to the economy and supports initiatives that help them.
Lowey, who represents part of Westchester County and all of Rockland, says according to a 2012 survey conducted by the National Small Business Association, 31 percent of small businesses rely on credit cards to finance their companies, and one-half of these carry a monthly balance. The National Small Business Association supports Lowey’s new Small Business Credit Card Act.
Kendra Porter founded a personal image agency for full-figured women in 2011, called Honor You, based in Westchester’s Hartsdale.
She says she would like to be able to separate her personal and business finances, but she gets better protection and rates as a consumer than as a small business. It’s the Credit Card Accountability, Responsibility and Disclosure, or CARD, Act passed by Congress in 2010 that protects individual consumers from what many considered unfair and deceptive practices. Kendra Porter says she would benefit from Lowey’s legislation, which would expand such protections to businesses like hers, with 50 or fewer employees.
Again, here’s Congresswoman Lowey.
Lowey’s legislation would prohibit credit card companies from raising interest rates in the first year of the account. Her legislation would also end late-fee traps, such as weekend deadlines and fees for online payments; and require credit card companies to apply payments to the balance with the higher interest rate; and notify small businesses ahead of an interest-rate increase.