CFPB Proposes to Ease Credit Card Access for Stay-at-Home Spouses

CFPB proposal clarifies CARD Act language intended to protect college students from exploitation

The Consumer Financial Protection Bureau (CFPB) recently proposed updates to the Credit Card Accountability Responsibility Disclosure Act (CARD Act) which would make it easier for stay-at-home spouses to quality for credit cards.

The CFPB’s proposed revision would allow credit card applicants who are 21 or older to rely on third-party income to which they have a reasonable expectation of access. Although the proposal applies to all applicants regardless of marital status, the CFPB said it expects that it will ease access to credit particularly for stay-at-home spouses or partners who have access to a working spouse's or partner’s income.

CFPB Director Richard Cordray said in announcing the proposal that “When stay-at-home spouses or partners have the ability to make payments on a credit card, they should be able to obtain a card in their own name.”

CFPB said that data made available to it suggest that “some otherwise creditworthy individuals have been declined for credit card accounts under the current regulation, even though they have the ability to make the required payments. Discussions with industry sources indicate that a significant number of these individuals may be stay-at-home spouses or partners with access to income from an employed spouse or partner.”

CFPB cited Census data saying that more than 16 million married people do not work outside the home. “That equates to approximately one out of every three married couples who now could have easier access to credit cards with the bureau’s proposal,” CFPB said.

The CFPB obtained jurisdiction over the CARD Act in July 2011, when regulatory supervision of Truth and Lending Act functions were transferred to the new agency.

Rep. Barney Frank, D-Mass., said in a statement that “until the recent action by the CFPB, language intended to protect college students from unfair exploitation was not sufficiently clear and left some to conclude that partners or spouses, who were not themselves earning the family’s income, were ineligible for credit cards.” Frank said that “this was never the congressional intent” and that he’s “very pleased that the CFPB has once again demonstrated its value to consumers by making that clear and by proposing a rule that will fully enable spouses and partners to receive credit cards in appropriate circumstances.”

The CARD Act became law in 2009 and requires that card issuers evaluate a consumer’s ability to make the necessary payments before opening a new credit card account. Under current CARD Act regulations issued by the Federal Reserve, a card issuer generally may only consider the individual card applicant’s income or assets.

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