Lowey Bill Protects Small Businesses From Credit Companies

U.S. Rep. Nita Lowey (D-Westchester/Rockland) is continuing her quest to protect small businesses from the big credit card companies.

Lowey wants to give businesses, with 50 employees or fewer, the same consumer protections given to individuals and says her legislation, the “Small Business Credit Card Act,” will achieve that.

“For many small businesses in New York and around the country, credit cards help keep the doors open and the company running,” said Lowey, according to a press release. “These businesses are the cornerstone of our economy, and we must do all we can to help them grow and hire more Americans.”

Lowey made her announcement during the 50th annual National Small Business Week

The congresswoman says that 31 percent of small businesses rely on credit cards to finance their operations, and that one in two business owners say credit card terms have gotten worse by increased interest rates, fees, and payment procedures.

“That’s why the same critical laws that protect individual consumers should also protect our small businesses,” said Lowey. “We need our small business owners to spend more time growing their businesses and less time worrying about the fine print.” 

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, passed by Congress in 2010, protects individual consumers from a range of inequitable and misleading practices used by credit card companies.

The Small Business Credit Card Act of 2013 would:

• Force credit card companies to notify small business before raising interest rates
• Eliminate interest rate increases in the first year of the account
• Get rid of unnecessary fees and interest charged on debts paid on time
• End so-called late fee “traps” such as weekend deadlines, changing due dates and fees for payments over the phone or online
• Apply payments to the balance with the higher interest rate

Lowey was featured in Patch in March 2011 and May 2011 for her efforts to protect small business from credit card companies. The bill was first proposed in 2011, since then it has been slightly altered and had 13 cosponsors on it last session. This is the first year that the bill is being endorsed by the National Small Business Association.

“America’s economy is dependent on a thriving small business community and small business owners increasingly are reliant on credit cards, which are one of the most common sources of financing for America’s entrepreneurs,” said Todd McCracken, President of the National Small Business Association, in a letter supporting Lowey’s proposed legislation. 

Lowey hopes the bill will gain more support and be passed by the 113th Congress.