I 

112TH CONGRESS 

1ST SESSION H. R. 1137 

To amend the Truth in Lending Act to provide coverage under such Act 

for credit cards issued to small businesses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2011 

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 Services 

A BILL 

To amend the Truth in Lending Act to provide coverage 

under such Act for credit cards issued to small businesses, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Small Business Credit Card Act of 2011’’. 

6 (b) FINDINGS.—The Congress finds as follows: 

7 (1) In past recessions, economic recovery has 

8 frequently been led by the creation of millions of 

9 new, small businesses. 


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1 (2) Today, however, small business owners are 

2 severely limited in their ability to finance new busi3 ness ventures because access to capital through tra4 ditional resources has dried up, and the lack of ac5 cess continues to grow. 

6 (3) Small businesses are being pushed into 

7 using credit cards as the primary source of working 

8 capital. 

9 (4) This use of credit cards is especially true 

10 for innovative and rapidly growing businesses which 

11 lack the assets necessary for a traditional loan. 

12 (5) In 2009, 59 percent of the small businesses 

13 surveyed used credit cards to meet their capital 

14 needs. 

15 (6) In 1993, only 16 percent of small busi16 nesses used credit cards as a source of financing. 

17 (7) One-third of small businesses using credit 

18 cards carry a monthly balance in excess of $10,000. 

19 SEC. 2. EXTENDING CREDIT CARD PROTECTIONS UNDER 

20 THE TRUTH IN LENDING ACT TO SMALL BUSI21 NESSES. 

22 (a) DEFINITION OF CONSUMER.—Section 103 of the 

23 Truth in Lending Act (15 U.S.C. 1602) is amended, if 

24 this Act is enacted before the designated transfer date, 


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1 in subsection (h) or, if this Act is enacted on or after such 

2 designated transfer date, in subsection (i)— 

3 (1) by striking ‘‘The adjective ‘consumer’, used 

4 with reference to a credit transaction, characterizes 

5 the transaction as one in which the party to whom 

6 credit is offered or extended is’’ and inserting ‘‘CON7 SUMER.— 

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2), the term ‘consumer’, when used as a ad10 jective to describe or modify a credit transaction or 

11 credit plan, means a transaction or credit plan under 

12 which credit is offered or extended to’’; and 

13 (2) by adding at the end the following new 

14 paragraph: 

15 ‘‘(2) SMALL BUSINESS INCLUDED UNDER CER16 TAIN CIRCUMSTANCES.— 

17 ‘‘(A) IN GENERAL.—For purposes of any 

18 provision of this title relating to a credit card 

19 account under an open end credit plan, the 

20 term ‘consumer’ includes any qualified small 

21 business. 

22 ‘‘(B) QUALIFIED SMALL BUSINESS.—For 

23 purposes of subparagraph (A), the term ‘quali24 fied small business’ means, with respect to any 

25 credit card account under an open end credit 


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1 plan, any business concern having 50 or fewer 

2 employees, whether or not— 

3 ‘‘(i) the credit card account is in the 

4 name of an individual or a business entity; 

5 and 

6 ‘‘(ii) any credit transaction involving 

7 such account is for business or personal 

8 purposes. 

9 ‘‘(C) EXCLUSION OF SMALL BUSINESS

10 AFTER ‘OPT OUT’ EFFECTIVE DATE.—The term 

11 ‘qualified small business’ shall not include any 

12 business concern described in subparagraph (A) 

13 after the effective date of any election under 

14 section 135(b) by the individual or business for 

15 which the credit card account referred to in 

16 such subparagraph has been established, so 

17 long as such election remains in effect.’’. 

18 (b) AMENDMENTS TO EXEMPTIONS.—Section 104 of 

19 the Truth in Lending Act (15 U.S.C. 1603) is amended— 

20 (1) in paragraph (1)— 

21 (A) by inserting ‘‘other than a credit 

22 transaction under an open end consumer credit 

23 plan in which the consumer is a qualified small 

24 business’’ after ‘‘agricultural purposes’’; and 


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1 (B) by inserting ‘‘other than qualified 

2 small businesses’’ after ‘‘organizations’’; and 

3 (2) if this Act is enacted before the designated 

4 transfer date, in paragraph (3), by striking 

5 ‘‘$25,000’’ and inserting ‘‘$50,000’’. 

6 (c) BUSINESS CREDIT CARD AMENDMENTS.—Sec7 tion 135 of the Truth in Lending Act (15 U.S.C. 1645) 

8 is amended— 

9 (1) by striking ‘‘The exemption provided by’’ 

10 and inserting ‘‘(a) IN GENERAL.—The exemption 

11 provided by’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(b) QUALIFIED SMALL BUSINESS OPT OUT FROM

15 COVERAGE.— 

16 ‘‘(1) NOTICE OF COVERAGE.—The disclosures 

17 under section 127(a) before opening a credit card 

18 account under an open end credit plan for a quali19 fied small business shall include a clear and con20 spicuous disclosure— 

21 ‘‘(A) that the qualified small business is 

22 treated as a consumer under this title and is 

23 subject to the requirements of this title as a 

24 consumer; 


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1 ‘‘(B) that the business may elect, in ac2 cordance with this subsection, to be exempt, 

3 under section 104(1), from this title to the 

4 same extent as any business other than a quali5 fied small business; and 

6 ‘‘(C) of the procedures for making the elec7 tion and for subsequently revoking any such 

8 election. 

9 ‘‘(2) ELECTION.—The Board shall prescribe 

10 procedures for making an effective election under 

11 this subsection and for revoking any such election. 

12 ‘‘(3) PROHIBITION ON DISCRIMINATION

13 AGAINST QUALIFIED SMALL BUSINESS.—No creditor 

14 may— 

15 ‘‘(A) discriminate against any business 

16 concern having 50 or fewer employees in con17 nection with any credit card account of, or any 

18 application for a credit card account by such 

19 business, under an open end credit plan on any 

20 basis; or 

21 ‘‘(B) require any qualified small business 

22 to make an election under this subsection as a 

23 condition for opening a credit card account, or 

24 for providing more advantageous terms for any 


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1 credit card account, under an open end credit 

2 plan.’’. 

3 (d) DESIGNATED TRANSFER DATE DEFINED.—For 

4 purposes of this section, the term ‘‘designated transfer 

5 date’’ has the meaning given such term under section 

6 1062 of the Dodd-Frank Wall Street Reform and Con7 sumer Protection Act. 

Æ 


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