I 

111TH CONGRESS 

1ST SESSION H. R. 3457 

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 

JULY 31, 2009 

Mr. ABERCROMBIE (for himself, Mrs. LOWEY, Mr. MICHAUD, and Mr. 

PERRIELLO) 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 2009’’. 

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 their access to capital through 

4 their usual resources has dried up, and the lack of 

5 access continues to grow. 

6 (3) Small businesses are being pushed into 

7 using credit cards as their primary source of work8 ing capital. 

9 (4) This use of credit card credit is especially 

10 true for rapidly growing businesses that are not tra11 ditional brick and mortar operations, and lack the 

12 assets necessary for a traditional loan. 

13 (5) Yet, 28 percent of businesses surveyed re14 cently said they had been subject to a decrease in 

15 their line of credit or a credit card limit in the past 

16 6 months. 

17 (6) And, this decrease in credit card limits oc18 curred despite the fact that 69 percent of the small 

19 businesses in the survey cited worsening credit card 

20 terms. 

21 (7) In 2008, 44 percent of the small businesses 

22 surveyed used credit cards to finance their business. 

23 (8) In 1993, only 16 percent of small busi24 nesses used credit cards as a source of financing. 


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1 (9) One-third of small businesses using credit 

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

3 SEC. 2. EXTENDING CREDIT CARD PROTECTIONS UNDER 

4 THE TRUTH IN LENDING ACT TO SMALL BUSI5 NESSES. 

6 (a) DEFINITION OF CONSUMER.—Section 103(h) of 

7 the Truth in Lending Act (15 U.S.C. 1602(h)) is amend8 ed— 

9 (1) by striking ‘‘(h) The adjective ‘consumer’, 

10 used with reference to a credit transaction, charac11 terizes the transaction as one in which the party to 

12 whom credit is offered or extended is’’ and inserting 

13 ‘‘(h) CONSUMER.— 

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2), the term ‘consumer’, when used as a ad16 jective to describe or modify a credit transaction or 

17 credit plan, means a transaction or credit plan under 

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

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

20 paragraph: 

21 ‘‘(2) SMALL BUSINESS INCLUDED UNDER CER22 TAIN CIRCUMSTANCES.— 

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

24 provision of this title relating to a credit card 

25 account under an open end credit plan, the 


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1 term ‘consumer’ includes any qualified small 

2 business. 

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

4 purposes of subparagraph (A), the term ‘quali5 fied small business’ means, with respect to any 

6 credit card account under an open end credit 

7 plan, any business concern having 50 or fewer 

8 employees, whether or not— 

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

10 name of an individual or a business entity; 

11 and 

12 ‘‘(ii) any credit transaction involving 

13 such account is for business or personal 

14 purposes. 

15 ‘‘(C) EXCLUSION OF SMALL BUSINESS

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

17 ‘qualified small business’ shall not include any 

18 business concern described in subparagraph (A) 

19 after the effective date of any election under 

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

21 which the credit card account referred to in 

22 such subparagraph has been established, so 

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

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

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


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1 (1) in paragraph (1)— 

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

3 transaction under an open end consumer credit 

4 plan in which the consumer is a qualified small 

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

6 (B) by inserting ‘‘other than qualified 

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

8 (2) in paragraph (3), by striking ‘‘$25,000’’ 

9 and inserting ‘‘$50,000’’. 

10 (c) BUSINESS CREDIT CARD AMENDMENTS.—Sec11 tion 135 of the Truth in Lending Act (15 U.S.C. 1645) 

12 is amended— 

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

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

15 provided by’’; and 

16 (2) by adding at the end the following new sub17 section: 

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

19 COVERAGE.— 

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

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

22 account under an open end credit plan for a quali23 fied small business shall include a clear and con24 spicuous disclosure— 


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

2 treated as a consumer under this title and is 

3 subject to the requirements of this title as a 

4 consumer; 

5 ‘‘(B) that the business may elect, in ac6 cordance with this subsection, to be exempt, 

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

8 same extent as any business other than a quali9 fied small business; and 

10 ‘‘(C) of the procedures for making the elec11 tion and for subsequently revoking any such 

12 election. 

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

14 procedures for making an effective election under 

15 this subsection and for revoking any such election. 

16 ‘‘(3) PROHIBITION ON DISCRIMINATION

17 AGAINST QUALIFIED SMALL BUSINESS.—No creditor 

18 may— 

19 ‘‘(A) discriminate against any business 

20 concern having 50 or fewer employees in con21 nection with any credit card account of, or any 

22 application for a credit card account by such 

23 business, under an open end credit plan on any 

24 basis; or 


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1 ‘‘(B) require any qualified small business 

2 to make an election under this subsection as a 

3 condition for opening a credit card account, or 

4 for providing more advantageous terms for any 

5 credit card account, under an open end credit 

6 plan.’’. 

Æ 


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