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Richard Cordray, the director of the Consumer Financial Protection Bureau Director, suggested that lenders should not be overly concerned about potential legal liability for making so-called "qualified mortgages."
September 20
WASHINGTON — The Consumer Financial Protection Bureau on Wednesday proposed an amendment to credit card rules that would make it easier for stay-at-home spouses to obtain credit.
At the urging of Democrats and Republicans, CFPB Director Richard Cordray told lawmakers last month that the agency planned to propose a rule that would allow stay-at-home mothers or fathers to rely on shared income from their spouses to qualify for credit cards.
"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," Corday said in a press release Wednesday. "Today the CFPB is proposing common-sense changes that would facilitate credit access for spouses or partners who do not work outside the home."
Several lawmakers, led by Reps. Shelley Moore Capito, R-W.Va., and Carolyn Maloney, D-N.Y., had called on the bureau to amend a Federal Reserve rule issued under the 2009 Credit CARD Act.
The law required issuers to evaluate a consumer's ability to make necessary payments before extending credit, but the Fed rule said issuers may only consider the individual applicant's income or assets when making a decision.
Under the proposed revision, the agency 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" in order to qualify for credit.
"Although the proposal applies to all applicants regardless of marital status, the bureau expects that it will ease access to credit particularly for stay-at-home spouses or partners who have access to a working spouse or partner's income," the agency said in a press release.
The agency said it received data showing that some otherwise credit-worthy borrowers were denied access to credit because of the current rules, many of whom appeared to be stay-at-home spouses.
More than 16 million people do not work outside the home, according to information provided by the bureau, which estimated that one out of every three married couples could have easier access to credit because of the amendment.
In a joint statement Wednesday with Rep. Louise Slaughter, D-N.Y., Maloney and Capito praised the CFPB's proposal.
"This is an excellent first step forward in solving the unintended consequence of otherwise credit worthy stay-at-home spouses being denied credit solely because they do not have an independent income," Capito said. "As I have said before, without a change, this rule could be especially punitive for women who are in a failing marriage or abusive relationship."
Maloney said the rule is a common sense solution that recognizes how modern-day families work.
"If a spouse stays at home, but participates in a household's financial decisions and has 'reasonable expectation of access' to the household income, then the spouse should be able to obtain a card," she said.
The comment period ends Dec. 17.
