The Virginia Small Business Commission continued its study of House Bill 2198 early September with the meeting of an ad hoc committee specifically formed to study the legislation, which would affect commercial credit reporting in the Commonwealth. NACM was in attendance, providing the committee with a necessary perspective from commercial credit professionals that has otherwise been absent from the debate.

Led by Small Business Commission civilian members Owen Van Syckle and Robert Marcus, the meeting began with a discussion of the bill’s intent by Delegate Michael Watson, the author and sponsor of HB 2198. Watson, along with two representatives from a local Virginia business that support the bill, noted that the legislation was designed to address a perceived gap in the rights of businesses to identify the source of so-called “negative information” on the commercial credit report. He said that businesses are denied the ability to improve their credit by the currently anonymous way that historical payment information about them is displayed in their credit report.

Richmond-area NACM member Doug Strobel of Titan America, who provided vital testimony at the Small Business Commission’s last hearing in June, again offered the perspective of a trade supplier, explaining how he uses commercial credit reports and how he conducts an assessment of a potential customer’s creditworthiness. Strobel also discussed how important credit information is to a credit report, and how such reports are integral to his ability to make a fast, accurate credit decision, once again making the case that HB 2198 could limit the amount of information available on businesses in Virginia by requiring commercial credit reporting providers to identify the source of “negative information” on a report.

Strobel added that the bill would a) dry up information on Virginia businesses, making it harder for them to acquire goods and services on terms; b) make credit reports on Virginia businesses less accurate, thereby delaying a credit decision which could in turn affect commerce in the Commonwealth; and c) place Virginia at a competitive disadvantage by restricting the free flow of credit information on businesses within the Commonwealth and not restricting the free flow of credit information on businesses located elsewhere. This last argument had, for the most part, never been made to the Small Business Commission and seemed to resonate with the members in attendance.

Following Strobel’s discussion, Delegate John Cox (R), a member of the Commission in attendance at the work group meeting who had previously shown mild support for HB 2198, spoke out against the bill, specifically stating that he believes it would make Virginia a less friendly state for businesses and place Virginia businesses at a competitive disadvantage because it would restrict the free flow of credit information.
Former NACM National Chairman Jack Clark, CCE also spoke about how incorrect information is handled in commercial credit reports, explaining that such information is removed from a report as quickly as possible and that a business that routinely reports incorrect information on subject companies would be prevented from submitting information for violating the terms of this exchange, which specifically addressed some of the committee member’s concerns about how this information is maintained. Also attending in support of NACM’s position were Virginia attorney Jim Fullerton and Karen Gothard and Roger Troup from Ferguson Enterprises.

The ad hoc committee now will compile a report on HB 2198 that will be presented to the full Small Business Commission at their next meeting on September 10. It was unclear whether or not the report would be a recommendation for or against HB 2198 or simply a summary of the arguments, but NACM plans to submit more documents to the Commission ahead of its final considerations.

NACM continues to oppose HB 2198, as it does any bill that threatens the free and open exchange of credit information, and will be monitoring the legislation through the Virginia legislature. If you have any questions or comments about HB 2198, please contact Jacob Barron, CICP at

Courtesy Jacob Barron, CICP, NACM staff writer (National Association for Credit Management)

New ImageBIIA supports the efforts of the NACM:  The proposed legislation will be counter-productive.  It will reduce access to finance for SMEs due to lack of transparency.   The G20 and the World Bank are working on initiatives to provide access to finance for SMEs by eliminating asymmetries of information.   Therefore the proposed legislation is going into the wrong direction.