New Study on Small Business Credit Card Protections

May 7, 2014

imsis548-049According to a recent study released by Cardhub that analyzes the country’s 10 largest banks with respect to their adoption of protections afforded by the Credit CARD Act of 2009, none of the major banks have “extended any significant CARD Act protections to small business card holders since last year, and small-business owners have not displayed either the financial literacy or the card comparison skills necessary to elicit change from issuers.” That being said, it appears that Bank of America is the most friendly bank when it comes to small-business credit cards while Wells Fargo, U.S. Bank, Citibank, and Discover have been the least friendly small-business credit card issuers. The study further reveals that all of the major credit card issuers hold their small-business card holders personally liable for the cards and only Bank of America and Citibank choose to not report a card holder’s usage on their personal credit reports.

In 2009, Congress passed the Credit Card Accountability, Responsibility and Disclosure Act (or the CARD Act), which effectively provided a number of safeguards advocated for by NSBA. However, it did not go far enough in the sense that it did not specify that the safeguards included in the measure would be applicable to small-business owners.

Last year, Rep. Nita Lowey (D – N.Y.) introduced the NSBA-supported Small Business Credit Card Act of 2013 (H.R. 2419) to further protect small-business owners’ credit cards from unfair and deceptive practices of credit card companies. For years, Rep. Lowey has been a key advocate for small-business credit card reform, particularly as such relates to certain industry-wide practices that unnecessarily impact small businesses.

NSBA will continue to work with Rep. Lowery’s office and any other Member who is interested in ensuring that small-business owners receive adequate protections with respect to their business credit cards.