NSBA Applauds Fed Rule on Credit-Card Abuse, Urges Congressional Action

May 14, 2008

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


Washington, D.C. — The National Small Business Association applauds the introduction of the “Unfair or Deceptive Acts or Practices” (UDAP) proposed rule from the Federal Reserve Board, the Office of Thrift Supervision at the U.S. Department of the Treasury, and the National Credit Union Administration. This aggressive new rule, already internally approved by the three aforementioned offices, aims to curtail the most egregious practices of the credit-card industry, and would apply to banks, thrifts, and credit unions.

“NSBA applauds federal regulators for proposing this overdue but commendably-strong rule. With more small- and mid- sized business owners identifying credit cards as a source of financing than any other capital resource, it is imperative for America’s economic engine—the small business community—that Congress recognize this proposal as a welcome first step, however, and not a mission accomplished.” stated NSBA President Todd O. McCracken.

The UDAP proposal would strengthen disclosure rules by requiring credit-card issuers to disclose in any solicitation the factors that determine interest rates. The proposed rule also would, among other things, prohibit double-cycle billing, prevent issuers from treating a card payment as late without giving customers a “reasonable” amount of time to make a payment, and prevent hikes on the interest rates for an outstanding balance unless certain exceptions apply.

McCracken went on to say, “I urge Congress to legislatively build on the strong regulatory foundation provided by this proposal and enact permanent laws that will protect America’s small business from the practices that are restricting their growth and harming the U.S. economy.”

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.


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