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Established Contributor
Posts: 597
Registered: ‎01-31-2008
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CCs must comply with Household income?

So I think it’s been 6 months since that law changed, which means I think that all CCCs must comply with the allowance of Household Income.  I know both Chase and Citi have already updated their app lingo to allow that inclusion.  I’m wondering if I should report an updated income to Barclays.  Any word on them?  I have zero desire to add a Barclay card and actually plan on phasing mine out.  However, I don’t want them to close it and think an updated income can only help.

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Established Contributor
Posts: 597
Registered: ‎01-31-2008
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Re: CCs must comply with Household income?


EaglesFan2006 wrote:

So I think it’s been 6 months since that law changed, which means I think that all CCCs must comply with the allowance of Household Income.  I know both Chase and Citi have already updated their app lingo to allow that inclusion.  I’m wondering if I should report an updated income to Barclays.  Any word on them?  I have zero desire to add a Barclay card and actually plan on phasing mine out.  However, I don’t want them to close it and think an updated income can only help.


Actually nm about the 6 month thing.  For the heck of it, I opened up a Cap One Venture app just to see what it said in the income description, and it had the word "personal" bolded and underlined.  So I guess every CC is different in regards to this.

Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Senior Contributor
Posts: 3,070
Registered: ‎11-02-2009
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Re: CCs must comply with Household income?

They were given 6 months to come into compliance with the new rule, but the new rule permits them to consider HH income.  It doesn't require them to consider it.  I imagine most banks will make the change, but I don't think they have to.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Senior Contributor
Posts: 11,485
Registered: ‎10-21-2012
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Re: CCs must comply with Household income?


Walt_K wrote:

They were given 6 months to come into compliance with the new rule, but the new rule permits them to consider HH income.  It doesn't require them to consider it.  I imagine most banks will make the change, but I don't think they have to.


+1

 

Correct.  It's ultimately up to each lender to decide whether they want to adopt this rule in their underwriting/consideration criteria, it is not a requirement on their part.  The new rule simply permits the flexibility.

Contributor
Posts: 180
Registered: ‎08-18-2012
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Re: CCs must comply with Household income?

I believe the others are correct, they must *consider* HHI but they are not *required* to include it for approval.

 

Also, many of the card companies have not yet changed their application forms to even include the option for HHI.  I know that Chase does and in fact does consider HHI (and has the option on their app).  Discover is tricky - I contacted them about it, and they stated that HHI could be considered but ONLY if you live in a community-property state (which I do not).  So, anyone wanting to apply for Discover with HHI should probably call their analysts before applying to make sure before you are denied or get an HP unneccessarily.

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Valued Contributor
Posts: 1,257
Registered: ‎07-18-2009
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Re: CCs must comply with Household income?

[ Edited ]

EaglesFan2006 wrote:

So I think it’s been 6 months since that law changed, which means I think that all CCCs must comply with the allowance of Household Income.  I know both Chase and Citi have already updated their app lingo to allow that inclusion.  I’m wondering if I should report an updated income to Barclays.  Any word on them?  I have zero desire to add a Barclay card and actually plan on phasing mine out.  However, I don’t want them to close it and think an updated income can only help.


The law change is permissive, and creditors are allowed to be more restrictive and require personal income only. It's up to them. The law doesn't allow "household income" in the broad sense but only income where you have a reasonable expectation of access should a lender choose to consider it. Finstar and Walt_K are correct except that the broad inclusion implied by "Household Income" is still not allowed.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
Senior Contributor
Posts: 3,070
Registered: ‎11-02-2009
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Re: CCs must comply with Household income?


cashnocredit wrote:

EaglesFan2006 wrote:

So I think it’s been 6 months since that law changed, which means I think that all CCCs must comply with the allowance of Household Income.  I know both Chase and Citi have already updated their app lingo to allow that inclusion.  I’m wondering if I should report an updated income to Barclays.  Any word on them?  I have zero desire to add a Barclay card and actually plan on phasing mine out.  However, I don’t want them to close it and think an updated income can only help.


The law change is permissive, and creditors are allowed to be more restrictive and require personal income only. It's up to them. The law doesn't allow "household income" in the broad sense but only income where you have a reasonable expectation of access should a lender choose to consider it. Finstar and Walt_K are correct except that the broad inclusion implied by "Household Income" is still not allowed.


Yes, I was using HHI loosley as included within income that you have a resonable expectation of access to.  I recognize that the regulation does not refer to HHI.  The thing that I think people are getting confused about is that there was a date for compliance, which suggests that lenders have to start following the rule at a certain time.  That is true.  But people are losing sight of the fact that there is more to the rule than this provision that was amended.  Banks have to be in compliance with the amended regulation by a certain time.  That includes making a determination of ability to repay and whatever else was in the rule.  Part of that is that they are now permitted (but not required) to consider additional income such as HHI in certain circumstances.  


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Established Contributor
Posts: 597
Registered: ‎01-31-2008
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Re: CCs must comply with Household income?

So would it be fair to put income you have "reasonable access" too... Ie a joint account?
Chase Freedom: $1500, Citi Diamond Preferred: $3000, Barclays: $3900, Chase Disney Visa: $1500, Chase Southwest Signature: $5000, Citi TY Preferred: $3000, Cap One Platinum: $1750, Cap One Platinum Rewards: $2500, Orchard Bank: $900, Kay Store Card: $6600, PayPal $2200
Frequent Contributor
Posts: 399
Registered: ‎04-30-2008
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Re: CCs must comply with Household income?

I hpe this helps:

 

§1026.51   Ability to Pay.

(a) General rule—(1)(i) Consideration of ability to pay. A card issuer must not open a credit card account for a consumer under an open-end (not home-secured) consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the consumer's ability to make the required minimum periodic payments under the terms of the account based on the consumer's income or assets and the consumer's current obligations.

 

(ii) Reasonable policies and procedures. Card issuers must establish and maintain reasonable written policies and procedures to consider the consumer's ability to make the required minimum payments under the terms of the account based on a consumer's income or assets and a consumer's current obligations. Reasonable policies and procedures include treating any income and assets to which the consumer has a reasonable expectation of access as the consumer's income or assets, or limiting consideration of the consumer's income or assets to the consumer's independent income and assets. Reasonable policies and procedures also include consideration of at least one of the following: The ratio of debt obligations to income; the ratio of debt obligations to assets; or the income the consumer will have after paying debt obligations. It would be unreasonable for a card issuer not to review any information about a consumer's income or assets and current obligations, or to issue a credit card to a consumer who does not have any income or assets.

Contributor
Posts: 180
Registered: ‎08-18-2012
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Re: CCs must comply with Household income?

Google amendment to Regulation Z of the Card Act.  You will find examples that card companies can consider - to be fully implemented by (I think) the end of Oct 2013.  The Card Act was amended, in part, to allow stay-at-home wives and husbands an opportunity to apply for credit using the only working spouse's income as a basis, provided that the non-working spouse also had expected reasonable access to, such as a shared/joint deposit account, such funds (and others) can be considered income in which to repay their card obligations.  The 2009 Card Act served to alienate millions of SAH spouses and others, and both they as well as numerous industries supported the measures to the amendment to now include SAH spouses.  The CFPB has this info on their website as well as testimony from consumers and the industry.  

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