Washington Watch - July 29, 2009

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Washington Watch - July 29, 2009

  Editor's Note: What's New at Washington Watch?

Those of you who are loyal readers may be wondering when the latest edition of Washington Watch Quarterly might be hitting your email Inbox. If you've not heard of the Quarterly, it's a digest of the top legislative updates that we think might be of interest to micro-businesses. Four times per year, it goes out instead of our usual weekly edition. Due to some ongoing maintenance of our newly designed site, the next issue of the Quarterly will be available in October. 

If you need a quick refresher on past Washington Watch issues in the meantime, make sure to check out our archive page.

All the best,

Kristin Oberlander, Editor 

 Quick Look: Credit Card Protection Act Includes Small Business Provisions

Earlier this year, the Obama Administration and Congress passed legislation to clamp down on certain practices in the credit card industry. The Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act of 2009 regulates disclosure requirements, interest rate charges and terms of established accounts. The measure also turns an eye toward the self-employed, many of whom fund their businesses with credit cards. Under the legislation, the Federal Reserve would be required to perform an analysis and report to Congress on the credit market for businesses with 50 employees or less. Among other items, the following will be included in the analysis:

  • The extent to which small business owners use their personal credit cards to fund their business operations.
  • The cost and availability of credit for small businesses.
  • Adequacy of protections against unfair or deceptive practices.
  • The use of risk-based pricing. 

The law also requires that an information security task force be assembled to "address the information technology security needs of small business" and help them prevent the loss of credit card data. Under the law, the task force would make recommendations to the Small Business Administration on new programs to address current and forseeable needs of micro-businesses.

Visit the Library of Congress to read more about the Credit CARD Act. 

  Consumer Financial Protection Agency Considered By Senate

The Senate Banking, Housing, and Urban Affairs Committee recently held hearing, titled "Creating a Consumer Financial Protection Agency: A Cornerstone of America’s New Economic Foundation." Chairman Christopher J. Dodd (D-Conn.) remarked that the American economy is in peril and it is now up to Congress to modernize for the well-being of the consumer. He lent his support to the Obama Administration's plan to form the Consumer Financial Protection Agency (CFPA), but charged that the financial services companies do not want the agency because it will level the playing field by establishing a meaningful set of standards.

Ranking Member Shelby (R-Ala.) said the potential of the CFPA must be examined, commenting that maintaining regulated and transparent markets ensures that consumers will participate in the market because they will feel protected. Consumer protection is important, he says, but Congress must recognize that risk cannot be eliminated from the marketplace and that the risks associated with financial products are largely circumstantial.

Like the Senate Committee, the witnesses at the hearing also had differing opinions on the potential role and effectiveness of the CFPA. Statements ranged from "believing the market will remain fair under the CFPA's watch though the market structure must change" to assertions that "the cost of implementing the CFPA will be very expensive for banks" and that those costs would be "passed on to consumers."


When President Obama announced his plans to create the CFPA, he said it would replace regulations created during the Great Depression. He said, "Millions of Americans who have worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibility of others and the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure."


Read more about the hearing here.


Small Biz Health Care Roundup

Here's a compilation of some of the week's top articles on health reform. See something missing? Email your picks to media@NASE.org.

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