Small Business Credit Card Act of 2018

Summary:  Small Business Credit Card Act of 2018  This bill amends the Truth in Lending Act to extend to qualified small businesses credit card protections currently provided to consumers, including limitations and disclosures regarding fees and interest rates.  The bill defines &quot;qualified small business&quot; as any business concern having 50 or fewer employees, whether or not: (1) the credit card account is in the name of an individual or a business entity, and (2) any credit transaction involving such account is for business or personal purposes. A qualified small business may elect to opt out of such coverage. A creditor is prohibited from: (1) discriminating against a qualified small business in connection with any credit card account; or (2) requiring any qualified small business to make an opt-out election as a condition for opening a credit card account, or for providing more advantageous terms for such an account.

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Credit Card Act of 2018''.
    (b) Findings.--The Congress finds as follows:
            (1) Economic growth has frequently been led by the creation 
        of millions of new, small businesses.
            (2) Today, small business owners are severely limited in 
        their ability to finance new business ventures because access 
        to capital through traditional resources has been restricted.
            (3) In 2017, 27 percent of small businesses surveyed cannot 
        access adequate financing.
            (4) Small businesses are being pushed into using credit 
        cards to meet capital needs.
            (5) This use of credit cards is especially true for 
        innovative and rapidly growing businesses which lack the assets 
        necessary for a traditional loan.
            (6) In 2017, 20 percent of small businesses say they were 
        forced to reduce their number of employees as a result of 
        inability to access financing.
            (7) In 2017, 31 percent of the small businesses surveyed 
        used credit cards to meet their capital needs.
            (8) In 1993, only 16 percent of small businesses used 
        credit cards as a source of financing.
            (9) One-half of small businesses using a credit card carry 
        a monthly balance, and one-quarter of small businesses carry a 
        monthly balance in excess of $10,000.
            (10) The average interest rate charged on small business 
        credit cards is 14.16 percent.
            (11) Nearly one-in-three small businesses with credit cards 
        have reported a worsening of terms, including increased 
        interest rates, fees, and payment procedures, making it more 
        difficult to expand operations or grow business.
            (12) Small business credit cards contracts do not include 
        consumer protections provided to individuals under the CARD 
        Act.

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

    (a) Definition of Consumer.--Section 103(i) of the Truth in Lending 
Act (15 U.S.C. 1602(i)) is amended--
            (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.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `consumer', when used as an 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''; 
        and
            (2) by adding at the end the following new paragraph:
            ``(2) Small business included under certain 
        circumstances.--
                    ``(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.
                    ``(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--
                            ``(i) the credit card account is in the 
                        name of an individual or a business entity; and
                            ``(ii) any credit transaction involving 
                        such account is for business or personal 
                        purposes.
                    ``(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.''.
    (b) Amendments to Exemptions.--Section 104(1) of the Truth in 
Lending Act (15 U.S.C. 1603(1)) is amended--
            (1) 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''; and
            (2) by inserting ``other than qualified small businesses'' 
        after ``organizations''.
    (c) Business Credit Card Amendments.--Section 135 of the Truth in 
Lending Act (15 U.S.C. 1645) is amended--
            (1) by striking ``The exemption provided by'' and inserting 
        ``(a) In General.--The exemption provided by''; and
            (2) by adding at the end the following new subsection:
    ``(b) Qualified Small Business Opt Out From Coverage.--
            ``(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--
                    ``(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;
                    ``(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; and
                    ``(C) of the procedures for making the election and 
                for subsequently revoking any such election.
            ``(2) Election.--The Board shall prescribe procedures for 
        making an effective election under this subsection and for 
        revoking any such election.
            ``(3) Prohibition on discrimination against qualified small 
        business.--No creditor may--
                    ``(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; or
                    ``(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.''.