I 

115TH CONGRESS 

2D SESSION H. R. 5660 

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 

APRIL 27, 2018 

Mrs. LOWEY 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 2018’’. 

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

7 (1) Economic growth has frequently been led by 

8 the creation of millions of new, small businesses. 

9 (2) Today, small business owners are severely 

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1 tures because access to capital through traditional 

2 resources has been restricted. 

3 (3) In 2017, 27 percent of small businesses sur4 veyed cannot access adequate financing. 

5 (4) Small businesses are being pushed into 

6 using credit cards to meet capital needs. 

7 (5) This use of credit cards is especially true 

8 for innovative and rapidly growing businesses which 

9 lack the assets necessary for a traditional loan. 

10 (6) In 2017, 20 percent of small businesses say 

11 they were forced to reduce their number of employ12 ees as a result of inability to access financing. 

13 (7) In 2017, 31 percent of the small businesses 

14 surveyed used credit cards to meet their capital 

15 needs. 

16 (8) In 1993, only 16 percent of small busi17 nesses used credit cards as a source of financing. 

18 (9) One-half of small businesses using a credit 

19 card carry a monthly balance, and one-quarter of 

20 small businesses carry a monthly balance in excess 

21 of $10,000. 

22 (10) The average interest rate charged on small 

23 business credit cards is 14.16 percent. 

24 (11) Nearly one-in-three small businesses with 

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1 cluding increased interest rates, fees, and payment 

2 procedures, making it more difficult to expand oper3 ations or grow business. 

4 (12) Small business credit cards contracts do 

5 not include consumer protections provided to individ6 uals under the CARD Act. 

7 SEC. 2. EXTENDING CREDIT CARD PROTECTIONS UNDER 

8 THE TRUTH IN LENDING ACT TO SMALL BUSI9 NESSES. 

10 (a) DEFINITION OF CONSUMER.—Section 103(i) of 

11 the Truth in Lending Act (15 U.S.C. 1602(i)) is amend12 ed— 

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

14 with reference to a credit transaction, characterizes 

15 the transaction as one in which the party to whom 

16 credit is offered or extended is’’ and inserting ‘‘CON17 SUMER.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), the term ‘consumer’, when used as an ad20 jective to describe or modify a credit transaction or 

21 credit plan, means a transaction or credit plan under 

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

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

24 paragraph: 


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1 ‘‘(2) SMALL BUSINESS INCLUDED UNDER CER2 TAIN CIRCUMSTANCES.— 

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

4 provision of this title relating to a credit card 

5 account under an open end credit plan, the 

6 term ‘consumer’ includes any qualified small 

7 business. 

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

9 purposes of subparagraph (A), the term ‘quali10 fied small business’ means, with respect to any 

11 credit card account under an open end credit 

12 plan, any business concern having 50 or fewer 

13 employees, whether or not— 

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

15 name of an individual or a business entity; 

16 and 

17 ‘‘(ii) any credit transaction involving 

18 such account is for business or personal 

19 purposes. 

20 ‘‘(C) EXCLUSION OF SMALL BUSINESS

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

22 ‘qualified small business’ shall not include any 

23 business concern described in subparagraph (A) 

24 after the effective date of any election under 

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


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1 which the credit card account referred to in 

2 such subparagraph has been established, so 

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

4 (b) AMENDMENTS TO EXEMPTIONS.—Section 104(1) 

5 of the Truth in Lending Act (15 U.S.C. 1603(1)) is 

6 amended— 

7 (1) by inserting ‘‘other than a credit trans8 action under an open end consumer credit plan in 

9 which the consumer is a qualified small business’’ 

10 after ‘‘agricultural purposes’’; and 

11 (2) by inserting ‘‘other than qualified small 

12 businesses’’ after ‘‘organizations’’. 

13 (c) BUSINESS CREDIT CARD AMENDMENTS.—Sec14 tion 135 of the Truth in Lending Act (15 U.S.C. 1645) 

15 is amended— 

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

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

18 provided by’’; and 

19 (2) by adding at the end the following new sub20 section: 

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

22 COVERAGE.— 

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

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

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1 fied small business shall include a clear and con2 spicuous disclosure— 

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

4 treated as a consumer under this title and is 

5 subject to the requirements of this title as a 

6 consumer; 

7 ‘‘(B) that the business may elect, in ac8 cordance with this subsection, to be exempt, 

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

10 same extent as any business other than a quali11 fied small business; and 

12 ‘‘(C) of the procedures for making the elec13 tion and for subsequently revoking any such 

14 election. 

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

16 procedures for making an effective election under 

17 this subsection and for revoking any such election. 

18 ‘‘(3) PROHIBITION ON DISCRIMINATION

19 AGAINST QUALIFIED SMALL BUSINESS.—No creditor 

20 may— 

21 ‘‘(A) discriminate against any business 

22 concern having 50 or fewer employees in con23 nection with any credit card account of, or any 

24 application for a credit card account by such 


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1 business, under an open end credit plan on any 

2 basis; or 

3 ‘‘(B) require any qualified small business 

4 to make an election under this subsection as a 

5 condition for opening a credit card account, or 

6 for providing more advantageous terms for any 

7 credit card account, under an open end credit 

8 plan.’’. 

Æ 


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