The Board of Governors of the Federal Reserve System has issued its: “Report to the Congress on the Use of Credit Cards by Small Businesses and the Credit Card Market for Small Businesses,” as required by a provision in the CARD Act (H.R. 627/S. 414), which President Barack Obama signed into law in May 2009.

While the report failed to offer concrete recommendations regarding the need to protect small-business credit cards, it did reinforce many of NSBA’s assertions regarding the credit cards used by small-business owners and highlighted the benefits of improved disclosure requirements.

The overall findings of the report are summarized in its last sentence: “[I]t is not apparent…that the potential benefits of applying substantive restrictions similar to those in TILA to small business cards outweigh the potential risk of increased cost and reduced credit card availability for small businesses.”

Of course, the report does not suggest—and does not offer any evidence to support the idea—that the potential risk of prohibiting unfair and deceptive practices from the small-business credit card market outweighs the potential benefits either.

The main argument against extending the protections against unfair and deceptive credit-card practices to the cards used by small-business owners is that it may result in higher capital costs and restricted availability. Small-business owners, however, already are experiencing higher capital costs and restricted availability—only without the benefit of any protections; and the likelihood of this situation being exacerbated is not explored.

NSBA remains more convinced than ever that the recently codified credit-card protections must be explicitly extended to the cards used by America’s small-business owners, and urges Congress to approve the Small Business Credit Card Act of 2009 (H.R. 3457). H.R. 3457 has been endorsed by more than fifteen national business and consumer organizations.

Click here to read the full report.