Op-ed | Protect small business from unintended consequences of bad legislation

DA SPOT in Downtown Brooklyn.
Photo courtesy of DA SPOT

As a small business owner, I work every day to keep my business up and running — and thriving. I own DA SPOT, a unique retail space featuring more than 100 creative brands by people of color.

Running a small business is beyond rewarding, but it has its difficulties, too. Small business owners have to juggle so many challenges, from managing our books and making rent to creating meaningful, lasting bonds with our customers and the people in our communities. 

Knowing the challenges we face, I am concerned about a bill in Congress sponsored by Senators Richard Durbin (D-IL) and Roger Marshall (R-KS), which would make it even harder to run a small business. This bill would negatively impact small businesses like mine and the communities we serve, which is exactly why I travelled to Capitol Hill recently to urge lawmakers to oppose the bill.

The Durbin-Marshall bill would impose new mandates on the credit market, forcing banks to have an additional payment processing network on credit cards. Giant corporations have the power to take advantage of an additional network option to lower their processing rates, but small businesses don’t have the same infrastructure or a team routing all of our transactions, so I don’t expect it would give us any meaningful savings.

On top of this, I am concerned that the bill would limit the funds banks have to invest in things like credit card rewards programs. I use points and rewards to cover business travel for myself and my staff — a support to my bottom line that I earn through regular business expenses.

The Durbin-Marshall bill could also limit the investments that banks can make in security and fraud protection, while opening credit cards to unfamiliar alternative payment processing networks. Unlike the corporate giants that are pushing for this bill, I can’t afford to pick up the tab on fraudulent charges. Small businesses like mine depend on the electronic payments system to keep our customers’ transaction data secure, and it’s important to keep it that way.

Michelle Cadore is owner and co-founder of DA SPOT NYC in Brooklyn, and the designer of YES I AM CLOTHING.Provided

As someone with deep roots in Brooklyn, I also have to think about the unintended consequences of Durbin-Marshall for my community. My friends and neighbors depend on our community banks and credit unions for small business loans and credit card access, and this bill could harm those institutions that help make credit accessible to underserved and marginalized folks. These institutions would likely need to tighten up their lending, and we’d likely see an increase in credit card fees and interest rates. Smaller banks are supposedly exempt from the bill, but similar legislation in the past has shown that changes this significant to the entire credit market do have repercussions for credit unions and community banks, which is why they are also opposed to Durbin-Marshall.

The Durbin-Marshall Credit Card Competition Act would give corporate giants a major boost at the expense of small businesses and people in communities like Brooklyn. We need legislation that supports credit access, security, and rewards programs, instead of undermining them.

Michelle Cadore is owner and co-founder of DA SPOT NYC in Brooklyn, and the designer of YES I AM CLOTHING. She is a board member of the Brooklyn Women’s Business Center Advisory Committee and the Fulton Mall Improvement Association/Downtown Brooklyn Partnership.