Credit Card Reform Ignores Small Business

Mark Ellis — Sun, 31 May 2009 00:26:54 +0000

President Obama signed a credit card reform law that would protect cardholders from retroactive rate hikes and other less-than-scrupulous tactics, but this law does not apply to small business cardholders. This means that small business owners who rely on even a single credit card account will still be subject to the same tactics that the law aimed to limit.

The Credit Card Accountability Responsibility & Disclosure Act takes effect in February but it will only protect private cardholders. About 11 percent of all credit card purchases are made by small business credit cards, a number that has been on the rise in the past couple of decades.

Congress did see several attempts to include small businesses in the entities protected by the act, but all attempts were all shot down. The Federal Reserve will, though, have the authority to examine credit card usage by small companies and recommend protections as they see fit.

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Credit Card Reform Ignores Small Business