[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3457 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Credit Card Act of 2009''.
    (b) Findings.--The Congress finds as follows:
            (1) In past recessions, economic recovery has frequently 
        been led by the creation of millions of new, small businesses.
            (2) Today, however, small business owners are severely 
        limited in their ability to finance new business ventures 
        because their access to capital through their usual resources 
        has dried up, and the lack of access continues to grow.
            (3) Small businesses are being pushed into using credit 
        cards as their primary source of working capital.
            (4) This use of credit card credit is especially true for 
        rapidly growing businesses that are not traditional brick and 
        mortar operations, and lack the assets necessary for a 
        traditional loan.
            (5) Yet, 28 percent of businesses surveyed recently said 
        they had been subject to a decrease in their line of credit or 
        a credit card limit in the past 6 months.
            (6) And, this decrease in credit card limits occurred 
        despite the fact that 69 percent of the small businesses in the 
        survey cited worsening credit card terms.
            (7) In 2008, 44 percent of the small businesses surveyed 
        used credit cards to finance their business.
            (8) In 1993, only 16 percent of small businesses used 
        credit cards as a source of financing.
            (9) One-third of small businesses using credit cards carry 
        a monthly balance in excess of $10,000.

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

    (a) Definition of Consumer.--Section 103(h) of the Truth in Lending 
Act (15 U.S.C. 1602(h)) is amended--
            (1) by striking ``(h) 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 ``(h) Consumer.--
            ``(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''; 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 of the Truth in Lending 
Act (15 U.S.C. 1603) is amended--
            (1) in paragraph (1)--
                    (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''; and
                    (B) by inserting ``other than qualified small 
                businesses'' after ``organizations''; and
            (2) in paragraph (3), by striking ``$25,000'' and inserting 
        ``$50,000''.
    (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.''.
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