Small business card holders have been left out once again, with their group's exclusion from the Credit CARD Act. Small enterprise supporters were disappointed and dismayed with the apparent lack of interest shown by legislators in promoting small business owners' welfare. Lawmakers have again failed to act on issues confronting small scale business card owners and from the looks of it, would not be changing their sentiments any time soon.
The Credit CARD Act, whose effective date has been moved from February 2010, to December 1, 2009, has again failed to include empowering provisions for small business enterprise credit card users.
During deliberations and prior to the passing of amendments, Hawaii Legislator, Neil Abercrombie, proposed several revisions to the Credit CARD bill, one of which is the expansion of coverage of "consumer" in the Truth and Lending Act, to small business credit card owners that employ 50 employees and below; small businesses with assigned credit ceilings of at least $50,000. This amendment found an ally in the person of Representative Barney Frank, who promised to throw his full support to the revisions if Congresswoman Velasquez, a known small business supporter, would also show interest in the proposal.
However, Representative Velasquez was indifferent to the revisions proposed by Abercrombie, which was ironic considering that she was a staunch advocate of small business rights and welfare.
Analysts noted that Abercrombie's proposed amendments were very timely and was meant to extend assistance to beleaguered small business owners reeling from the effects of this economic slowdown.
Studies have revealed that a lot of small scale enterprises are presently struggling, having to cope with falling revenues while trying to maintain operations at the same time. Even if revenue streams come in slow, small business owners still have to contend with business costs, especially expenses that remain constant regardless if business is doing well or not.
Statistics show that at present, up to 60% of all small enterprise operators have amassed credit card bills amounting to more than $50,000, and that almost a quarter from that group are having to pay interest rates of 20% upwards.
Mr. Abercrombie's proposed amendments would have given small business owners protection against credit card companies that unfairly impose astronomical interest rates and fees on business accounts. In addition, this bill compels credit card owners to give at least 45 days notice to card holders who will be assessed of higher fees and interest charges.
At present, credit card companies have been ramping up their interest rates in anticipation of the Credit CARD Act which would severely limit their ability to dictate interest rates and charges.