Credit Reform Act Does Not Provide Protection for Small-Business Borrowers
Small-business cardholders are not included in the protection that shall be provided in the Credit Card Reform Act, which was signed into a law by President, Barack Obama, last May.
When House of Representatives passed a bill that would move the date of implementation of this Credit Card Reform Act of 2009 from February 2010 to December 1 this year, Representative Neil Abercrombie, a Democrat from Hawaii, has outlined an amendment that would include small-business companies in the definition of credit card "consumer" in the Truth in Lending Act.
In this said amendment, Abercrombie proposed those firms with 50 employees or less should be extended the same protection as ordinary consumers may enjoy upon implementation of this law.
Banks and financial lending companies will not have freedom to raise interest rates and charge fees on business credit accounts; they shall be given 45 days notice before doing the same and transactions limit will increase to $50,000 from $25,000. These are some privileges and protections that Abercrombie is pursuing in drafting an amendment.
The National Small Business Association (NSBA) reported recently that almost 60 percent of its members are using credit cards to fund their businesses. These small firms are paying 20 percent in interest.
The NSBA and other small business advocate groups had lobbied the proposal twice; first when the credit reform act was being deliberated in the House and second when legislators were considering the bill that will expedite implementation of the law. They were not successful in convincing Congress to include small-business groups as credit card "consumers."
After two failures, Abercrombie has filed his proposal as an independent bill. House Committee on Financial Services Chairman Representative, Barney Frank, has promised lobbyists that they will conduct hearings on Abercrombie measure.
However, the earliest schedule that this proposal could get would not be until the first quarter of next year, after the committee finishes with the regulatory reform.
However, New York Democrat Representative, Nydia Velazquez, Chairwoman of the House Small Business Committee, did not show any enthusiasm on Abercrombie measure.
Even Republicans on the Senate Finance Committee shared the same sentiments as Velazquez's, saying that consumers and businesses are different from one another.
They said there are different standards, requirements, rules for business borrowers. Small business companies and consumers are both borrowers and the former do not automatically include in protections provided in the new credit law.
Republican legislators, on the other hand, suggested that small business advocates should consider seeking law that will restrict credit providers for small companies.
More® Card
- 0% APR on Balance Transfers for a FULL 12 months.
- 0% APR on Purchases for a FULL 6 months.
- 5% Cashback Bonus® in categories that change like travel, gas, groceries, restaurants and more.
More® Card - Wildlife Collection
- 0% APR on Balance Transfers and Purchases for a full 6 months.
- 5% Cashback Bonus® in categories that change like travel, gas, groceries, restaurants and more.
- Up to 1% unlimited Cashback Bonus on all other purchases automatically.
More® Card - American Flag
- 0% APR on Balance Transfers and Purchases for a full 6 months.
- 5% Cashback Bonus® in categories that change like travel, gas, groceries, restaurants and more.
- Up to 1% unlimited Cashback Bonus on all other purchases automatically.
Credit Cards eZine
For the past few years, college campuses have been a very promising market for banks and credit companies. There has been a lot of talk about the pros and cons of student credit card applications. While some people believe that student credit deals are nothing but a dangerous financial weapon, the others consider credit cards for students as the integral part of financial freedom. Anyway, credit deals for students were readily available in the recent years, but things have changed greatly. And now in tough economic times, youth folks may find it more difficult to get access to credit. So, the question becomes: how to apply for a student credit card in difficult economic times?
Click here to read more...All through our lives, we move from one stage to another, and just like that we move from no credit to excellent scores in hopes of getting low interest rates and deals with good terms. When beginners apply for their first credit card, they want to get access to credit and build a solid payment history that will let them borrow money on favorable terms. But even if your FICO is almost perfect, it doesn't mean that you can sit back and relax. Good credit requires much work to be done and if you have good scores, you should know how to manage your credit responsibly without getting far into debt. Read more tips on how to maintain your good credit rating.
Click here to read more...When choosing between numerous credit card applications, we want to get the most of our new card. Even though there’s no card that is right for everyone, many credit offers present some tempting features designed to entice you to submit your application online. Whether it’s a large amount of complimentary bonus rewards points or zero interest rates for a certain period of time, you may be enticed to apply for the product that doesn’t fit your individual needs. The question is, how to choose the card that is right for you? Read more about the terms and conditions you should look at when selecting the best credit card.
Click here to read more...
