Lowey and Westchester Small Businesses Call For Business Credit Card Protections

Small businesses need credit to survive, but credit cards they increasingly are forced to use don't have the same protections that consumer credit cards do. The difference is driving some companies out of business and ruining others—a group of Westchester small business owners say.  
    

"Small business is the backbone of America,” said Manny Polloni, who owns American Terrain Outdoors in White Plains with his wife Rosanna. “Many of us have used credit cards, and been taken advantage of."

Local business owners joined Congresswoman Nita Lowey (D - Harrison) Tuesday, at a press conference held at American Terrain Outdoors, to call for the passage of a bill assigning the same protections to small business credit card users that individual users received last year. The bill, the Small Business Credit Card Act (HR3457), is being co-sponsored by Lowey. 

"The more I learn about this, the angrier I get," said Lowey, at a press conference Tuesday. "It is outrageous when banks are getting away with this. I pledge to you, to work hard on this. I want to report success in this session." 
   

Among its several provisions, the bill would prevent credit card companies from raising interest rates without giving notice. It would also prohibit increasing the interest rates on existing balances and prohibit charging interest for debts that are paid on time. 

The CARD Act (Credit Card Accountability, Responsibility and Disclosure) was passed by Congress last year. It already protects individual consumers against "unfair and deceptive practices." However, small businesses with fewer than 50 employees are not protected by the act.

"Small business owners are some of the largest consumers in our economy,” said Executive Director of the White Plains Business Improvement District Rick Ammirato, at the conference. “They need credit. They deserve the same types of protection we have as consumers."
   

The new bill would require credit card companies to apply excess payments to high interest balances. It would also require the companies to allow 21 days to pay bills and to end "traps" such as weekend due dates and late fees. It would eliminate extra payments for paying by phone. 
   

Roselyn and Irwin Katz, who own Helicon Records in White Plains, saw their credit card interest rates jump from 15 to 29 percent without any notice.

"We were also told we'd revert to our old interest rate,” said Katz, at the event. “We didn't. We're not happy. They pulled the rug out from under us."
   

Eric Newland, the owner of Larchmont's Designer One clothing store, said that 70 percent of his store’s merchandise is put on credit cards.

"Credit cards are being used now more than ever, as factoring businesses have been punitive in their dealings. We need flexibility," he said. "We need this bill."
   

Another local business owner, Peggy Paine, who co-owns Playground Medic in Hawthorne, said that after she and her business partner paid down their debt, their credit card company revised their credit limit downward and stated they had a bad debt to credit ratio. 
   

“As you look around, the vacancy rates are growing in town,” said Polloni. “If you can't fill these spaces with small business people, you're going to have empty downtowns—so that's why it's important that this type of funding is available.  And at a rate that's fair. I never thought I'd say 12 percent was fair, but that's what I'm saying."

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