Board of Governors/Secretary Jennifer J. Johnson Federal Reserve System 20th and Constitution Ave. Washington D.C. 20551 RE: Docket #1314 Dear Secretary Johnson: On behalf of the Small Business & Entrepreneurship Council (SBE Council), I write to you regarding the Federal Reserve Board's recent proposal to impose severe restrictions on the terms and fees of low limit or "subprime" credit cards. We are deeply concerned that this proposed rule would have a negative impact on consumers, businesses and our economy. The mortgage crises and tightening credit conditions have made it increasingly difficult for many consumers to obtain a loan, or gain access to credit -- especially those with credit history problems. In today's world, credit cards are vital credentials that are responsible for generating and driving a wide range of commercial activity. To meet the demand for credit in underserved segments, companies offering low limit credit cards play a critical role in our economy by allowing individuals to rebuild their credit, and for families to re-enter the economic mainstream. Should the proposed rule become law, this important tool for financial stability and success would be greatly diminished. "Low limit" or "subprime" credit cards are a lifeline for millions of Americans looking to rebuild and restore their financial situation. In fact, hundreds of thousands of consumers have restored their credit and have graduated to higher limit cards. Low limit cards provide much needed credit for consumers, particularly the growing number of those who can no longer fall back on the equity in their homes as a source of credit in the current crisis. As you proceed, the adoption of several common sense reforms to protect consumers makes sense. However, it is critically important that you also protect continued access to credit. Of course, credit card companies should be held to high standards when it comes to disclosing terms and requirements to consumers. Card issuers should also use consistent standards when selecting applicants to receive a card. However, we feel it is imperative that you avoid policies that dictate the price and structure companies must adopt in offering credit to consumers. Such a scheme would be akin to price fixing, and would effectively substitute the judgment of the federal government for that of the individual, and their needs. Thank you for continuing to keep the interests of businesses and consumers in mind as you move forward. Please do not hesitate to contact SBE Council if you have questions, or need additional information. Sincerely, Karen Kerrigan, President & CEO | 
