NSBA Chair Testifies Before Senate Small Business Committee

April 16, 2008

Contact:
Molly Brogan
202-552-2904
press@nsba.biz

Washington, D.C. - NSBA Chair Marilyn Landis testified before the Senate Committee on Small Business and Entrepreneurship on how small businesses are dealing with a lagging economy. Landis was joined at the hearing, “The Impact of the Credit Crunch on Small Business” by Frederic Mishkin, a member of the Federal Reserve Board of Governors, Steven Preston, Administrator of the Small Business Administration, and Daniel O’Connell, Secretary of the Massachusetts Office of Housing and Economic Development.

Landis outlined some of the many challenges her own business has faced, including unreasonable credit card rate increases, a spike in related fees, and a reduction in her credit line due only to her growing business and an increased use of her credit-cards.

“I am not alone. In fact, the recently released 2008 NSBA Survey of Small and Mid-Sized Business found 57 percent of small businesses have experienced worsening credit card terms in the last 12 months,” Landis stated.

In addition to improvements to the U.S. Small Business Administration’s loan programs, Landis called for much-needed reform of the credit-card industry. Specifically, she called for improved—not merely more—disclosure and industry-wide standards for defining timely payment. Landis also cited the need to eliminate universal defaults, double-cycle billing, retroactive interest rate hikes, interest charges on transaction fees, and extra interest charges on debt that is already paid in full.

“Credit cards have become the most highly-used source of financing for small-business owners. Forty-four percent of respondents to the 2008 NSBA survey cited credit cards as source of financing—the only source of financing that did not decrease between 2007 and 2008,” Landis said. “If we continue to rely on small business to bring our country out of this economic downturn—as we’ve done in the past—we absolutely must provide them with the tools to grow.”

Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. Reaching more than 150,000 small businesses, NSBA is proud to be the first national small-business advocacy organization in the United States. To find out more about the importance of the small-business community, please visit NSBA’s Small Business: 70 Million Strong…And Voting campaign at www.nsba.biz/vote.

Please click here to review NSBA’s Credit-Card Reform Issue Brief, and click here for complete results of the 2008 NSBA Survey of Small and Mid-Sized Business.
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