April 02, 2010
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News: BofA Protects Sm Business Owners
When U.S. lawmakers designed the Credit Card Accountability Responsibility and Disclosure Act of 2009, they failed to include small business credit card accounts. In fact, it has been said that the oversight was really not an oversight, but failure to exclude small business accounts was intentional. I am inclined to agree. Despite the so called oversight, the Bank of America released a statement saying it would not be excluding small businesses from the credit card reform rules and it would be granting them the same protections as consumer card accounts. Those protections include the prevention of interest rate increases on existing balances, a 45 day advance notice on rate changes, eliminate the over-the-limit penalties, extended grace periods, and a 25 day period for payment due dates.
The two million small business credit cardholders can expect to see the new rules in place sometime between May and July. This is strictly a voluntary move on the part of Bank of America as a result of relentless attempts in Washington that have failed to pass legislation to protect small business owners. Bank of America is the first and only bank to step up to the plate to provide business cardholders these protections. If other banks do not follow suit, they may find their small business credit cardholders switching to Bank of America; no doubt a smart move on the bank's part.
In addition to dealing with high credit card delinquencies and defaults over the past year, Bank of America has the added pressure of corporate restructure and dealing with the Merrill Lynch scandal. Bank of America is one of the largest financial services organizations in the world and the largest bank holding company by assets in the U.S. and the second largest by market capitalization. The company operates in over 150 countries. The acquisition of Merrill Lynch in 2008 which brought the bank to the center of a fraudulent scandal also made Bank of America the world's largest wealth holder.