Debate is heating up on the question of whether a nonworking spouse who relies on "household income" can qualify for a credit card account.
In a June 6 hearing before the U.S. House Financial Services Committee, a diverse array of lawmakers, consumer advocates, financial services and retail industry representatives aired their views on a provision of the Credit Card Accountability, Responsibility and Disclosure Act that blocks certain people from gaining credit by requiring them to prove their individual ability to repay loans.
The Fed proposed the rule in 2010 and it went into effect last year (
Support appears to be coalescing in favor of reversing a provision in which Federal Reserve specified that credit card applicants younger than 21 be asked to disclose their individual instead of household income.
The move was designed to protect young consumers from becoming burdened by debt from cards they could not afford. But the Fed's rule applied the requirement to all card applicants, regardless of age.
Consumer advocacy groups, key lawmakers, the American Bankers Association and the National Retail Federation are aligned in their support of reversing the provision.
But exactly how lawmakers might change the provision is unclear. The Consumer Financial Protection Bureau has invited public comment on the matter.
In a June 6 statement, the ABA called upon the bureau to revise the "flawed legislation."
The retail federation is also looking to the consumer bureau to make a change in the law.
“The Federal Reserve rule has placed stay-at-home spouses in the untenable position of either lying about their independent income … or potentially being embarrassed in front of other customers when they are declined,” the retail federation said in its testimony. “The embarrassment of customers in stores is not good for customers, store employees or brands’ reputations.”
"A small tweak of the (CARD Act) could help countless stay-at-home spouses," Carolyn McCarthy, D-NY, said at the hearing.
So far the process is "in its early stages, mainly answering questions," a spokesperson for McCarthy, tells PaymentsSource.
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