Federal Issue Brief

 H.R. 1137, Small Business Credit Card Act

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AVMA Position:



H.R. 1137 sponsored by Rep. Nita Lowey (D-NY-18) amends the Truth in Lending Act (TILA) to provide coverage for credit cards issued to small businesses. The legislation extends the protections previously codified by the U.S. Congress to the credit cards used by America's small-business owners.


  • Although the credit cards of many, if not most, small-business owners are based on the individual owner's personal credit history, the cards are exempt from the credit-card reform legislation signed into law in 2009.
  • This is due to the law amending the Truth in Lending Act (TILA), which for the most part applies only to "consumer" and not business credit cards.
  • TILA defines a "consumer" as a "natural person who seeks or acquires goods, services, or money for personal, family, household use other than for the purchase of real property."
  • While a small-business owner who opens a personal credit-card account and uses it occasionally for business should be covered under TILA, it is unclear that this law will protect a small-business owner who uses his/her card exclusively or even primarily for business purposes.
  • While card issuers historically have kept most of their small-business cards in compliance with TILA, there is no guarantee this convention will continue, when one considers that its basis appears to have been based upon practicality and not legal obligation.
  • Given the absence of any explicit protection for the cards small-business owners use, the recent reforms inadvertently provided an incentive for issuers to break from this precedent.
  • Congress can correct this by extending equal protection to the cards used by small-business owners with 50 or fewer employees.


  • Owners of veterinary practice are mostly small-business owners.
  • Small-business owners increasingly are reliant upon credit cards, which are one of the most common sources of financing for America's entrepreneurs.
  • America's economy is dependent upon a thriving small-business community; veterinary practices play a role in this community.
  • Over half of small- and mid- sized business owners use credit cards to finance their firms.

Current Status:

Committee on Financial Services

AVMA Contact:

Gina Luke, Assistant Director, Governmental Relations Division, 202-289-3204