HR 1137 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 1137CommentsClose CommentsPermalink

To amend the Truth in Lending Act to provide coverage under such Act for credit cards issued to small businesses, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

March 16, 2011CommentsClose CommentsPermalink

Mrs. LOWEY (for herself, Ms. WOOLSEY, Mr. MCGOVERN, Mr. KUCINICH, Ms. SCHAKOWSKY, Mr. HONDA, Ms. NORTON, Mr. NADLER, Mr. DEFAZIO, and Mr. GRIJALVA) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Truth in Lending Act to provide coverage under such Act for credit cards issued to small businesses, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; FINDINGS.

(a) Short Title- This Act may be cited as the ‘Small Business Credit Card Act of 2011’.CommentsClose CommentsPermalink





(b) Findings- The Congress finds as follows:CommentsClose CommentsPermalink





(1) In past recessions, economic recovery has frequently been led by the creation of millions of new, small businesses.CommentsClose CommentsPermalink





(2) Today, however, small business owners are severely limited in their ability to finance new business ventures because access to capital through traditional resources has dried up, and the lack of access continues to grow.CommentsClose CommentsPermalink





(3) Small businesses are being pushed into using credit cards as the primary source of working capital.CommentsClose CommentsPermalink





(4) This use of credit cards is especially true for innovative and rapidly growing businesses which lack the assets necessary for a traditional loan.CommentsClose CommentsPermalink





(5) In 2009, 59 percent of the small businesses surveyed used credit cards to meet their capital needs.CommentsClose CommentsPermalink





(6) In 1993, only 16 percent of small businesses used credit cards as a source of financing.CommentsClose CommentsPermalink





(7) One-third of small businesses using credit cards carry a monthly balance in excess of $10,000.CommentsClose CommentsPermalink

SEC. 2. EXTENDING CREDIT CARD PROTECTIONS UNDER THE TRUTH IN LENDING ACT TO SMALL BUSINESSES.

(a) Definition of Consumer- Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended, if this Act is enacted before the designated transfer date, in subsection (h) or, if this Act is enacted on or after such designated transfer date, in subsection (i)--CommentsClose CommentsPermalink





(1) by striking ‘The adjective ‘consumer’, used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is’ and inserting ‘Consumer-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraph (2), the term ‘consumer’, when used as a adjective to describe or modify a credit transaction or credit plan, means a transaction or credit plan under which credit is offered or extended to’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(2) SMALL BUSINESS INCLUDED UNDER CERTAIN CIRCUMSTANCES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of any provision of this title relating to a credit card account under an open end credit plan, the term ‘consumer’ includes any qualified small business.CommentsClose CommentsPermalink





‘(B) QUALIFIED SMALL BUSINESS- For purposes of subparagraph (A), the term ‘qualified small business’ means, with respect to any credit card account under an open end credit plan, any business concern having 50 or fewer employees, whether or not--CommentsClose CommentsPermalink





‘(i) the credit card account is in the name of an individual or a business entity; andCommentsClose CommentsPermalink





‘(ii) any credit transaction involving such account is for business or personal purposes.CommentsClose CommentsPermalink





‘(C) EXCLUSION OF SMALL BUSINESS AFTER ‘OPT OUT’ EFFECTIVE DATE- The term ‘qualified small business’ shall not include any business concern described in subparagraph (A) after the effective date of any election under section 135(b) by the individual or business for which the credit card account referred to in such subparagraph has been established, so long as such election remains in effect.’.CommentsClose CommentsPermalink





(b) Amendments to Exemptions- Section 104 of the Truth in Lending Act (15 U.S.C. 1603) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1)--CommentsClose CommentsPermalink





(A) by inserting ‘other than a credit transaction under an open end consumer credit plan in which the consumer is a qualified small business’ after ‘agricultural purposes’; andCommentsClose CommentsPermalink





(B) by inserting ‘other than qualified small businesses’ after ‘organizations’; andCommentsClose CommentsPermalink





(2) if this Act is enacted before the designated transfer date, in paragraph (3), by striking ‘$25,000’ and inserting ‘$50,000’.CommentsClose CommentsPermalink





(c) Business Credit Card Amendments- Section 135 of the Truth in Lending Act (15 U.S.C. 1645) is amended--CommentsClose CommentsPermalink





(1) by striking ‘The exemption provided by’ and inserting ‘(a) In General- The exemption provided by’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(b) Qualified Small Business Opt Out From Coverage-CommentsClose CommentsPermalink





‘(1) NOTICE OF COVERAGE- The disclosures under section 127(a) before opening a credit card account under an open end credit plan for a qualified small business shall include a clear and conspicuous disclosure--CommentsClose CommentsPermalink





‘(A) that the qualified small business is treated as a consumer under this title and is subject to the requirements of this title as a consumer;CommentsClose CommentsPermalink





‘(B) that the business may elect, in accordance with this subsection, to be exempt, under section 104(1), from this title to the same extent as any business other than a qualified small business; andCommentsClose CommentsPermalink





‘(C) of the procedures for making the election and for subsequently revoking any such election.CommentsClose CommentsPermalink





‘(2) ELECTION- The Board shall prescribe procedures for making an effective election under this subsection and for revoking any such election.CommentsClose CommentsPermalink





‘(3) PROHIBITION ON DISCRIMINATION AGAINST QUALIFIED SMALL BUSINESS- No creditor may--CommentsClose CommentsPermalink





‘(A) discriminate against any business concern having 50 or fewer employees in connection with any credit card account of, or any application for a credit card account by such business, under an open end credit plan on any basis; orCommentsClose CommentsPermalink





‘(B) require any qualified small business to make an election under this subsection as a condition for opening a credit card account, or for providing more advantageous terms for any credit card account, under an open end credit plan.’.CommentsClose CommentsPermalink





(d) Designated Transfer Date Defined- For purposes of this section, the term ‘designated transfer date’ has the meaning given such term under section 1062 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.CommentsClose CommentsPermalink