Lenders hit small businesses with higher fees, more offers
By Credit.com Staff
Many small businesses are now reporting that credit card lenders are now increasing penalty fees and rates while decreasing payment periods as they attempt to make up some of the profits they lost because of the Credit CARD Act's consumer protections, the Bergen Record reported. In addition, banks are sending companies more applications for new accounts because the laws restrict the way they can mail them to individuals.
The report said that some businesses have seen late fees rise from $29 to $50, with due dates cut back to 14 days after the bill arrives, down from 25.
Many have criticized government officials for not closing the loophole that allows lenders to hound small business owners while still protecting consumers. The latter group has largely benefited from the passage of the regulations, as consumer credit has declined for several months, as have the rates of charge offs and delinquencies.
