@Revelate wrote:@Walt: telling a bank they need to consider HHI for applicants is worlds different than telling them who they have to approve.
It's just one bit of information in a much more comprehensive underwriting process.
In reality it's not going to change much of anything at all; except making it feasible for non-wage earners in single income families (and similar) to get over the "being reasonably able to pay it back." hurdle that the government placed on them earlier.
Sometimes legislation and regulation have unintended consequences, and this was likely one of them. Hence, they're making a comparitively minor redress of the issue. Also there is precedent for this, the whole FICO '08 AU fiasco was nearly identical both in demographic and result.
I agree there's much more important things to figure out, but in the grand scheme of all the things which get thrown into our bureaucracy, this one is likely one of the better social good things to happen.
I think you misunderstand me. I object to the prior regulation that told them they can't consider HHI, which in effect limited people they could approve because it meant that they had to treat some people as effectively having no income. I'm in favor of letting banks consider HHI if they so choose. I was only pointing out a difference in focus. While I approve of the result, i.e., that stay at home spouses get more access to credit, that isn't really my primary concern. I mainly think that it is an unfair on lenders to restrict the criteria they can reasonably consider. I think we're both arguing for the same thing, but for different reasons.
And I understand that this is only one small part of the approval process. Which is why I pointed out earlier that people who are so adamantly against using HHI are not considering how widespread the supposed abuses will be, and are failing to consider other controls that are already in place, i.e., pulling the person's credit report, continuing to monitor the account, etc. Lenders aren't making a decision in a vacuum with HHI as their only piece of information.
Starting Score: ~500 (12/01/2008)
@Walt_K wrote:
@Revelate wrote:@Walt: telling a bank they need to consider HHI for applicants is worlds different than telling them who they have to approve.
It's just one bit of information in a much more comprehensive underwriting process.
In reality it's not going to change much of anything at all; except making it feasible for non-wage earners in single income families (and similar) to get over the "being reasonably able to pay it back." hurdle that the government placed on them earlier.
Sometimes legislation and regulation have unintended consequences, and this was likely one of them. Hence, they're making a comparitively minor redress of the issue. Also there is precedent for this, the whole FICO '08 AU fiasco was nearly identical both in demographic and result.
I agree there's much more important things to figure out, but in the grand scheme of all the things which get thrown into our bureaucracy, this one is likely one of the better social good things to happen.
I think you misunderstand me. I object to the prior regulation that told them they can't consider HHI, which in effect limited people they could approve because it meant that they had to treat some people as effectively having no income. I'm in favor of letting banks consider HHI if they so choose. I was only pointing out a difference in focus. While I approve of the result, i.e., that stay at home spouses get more access to credit, that isn't really my primary concern. I mainly think that it is an unfair on lenders to restrict the criteria they can reasonably consider. I think we're both arguing for the same thing, but for different reasons.
And I understand that this is only one small part of the approval process. Which is why I pointed out earlier that people who are so adamantly against using HHI are not considering how widespread the supposed abuses will be, and are failing to consider other controls that are already in place, i.e., pulling the person's credit report, continuing to monitor the account, etc. Lenders aren't making a decision in a vacuum with HHI as their only piece of information.
This point is very significant and, I think, a reason why lenders wished to relax the "individual income" requirement. People were used to household income and often used that anyway and that doesn't include people that just inflated their incomes. By adversely affecting people that actually read the apps and honestly apply they could be losing some of their best potential customers. They don't give a lot of weight to "income" anyway since they can't easily directly verify it.
I always report HHI on credit apps and when I got a cc from Alliant the rep asked for my pay stubs. I said OK I'll be sending mine and my wifes 
. They didn't mind...
@lanc wrote:I always report HHI on credit apps and when I got a cc from Alliant the rep asked for my pay stubs. I said OK I'll be sending mine and my wifes
Exactly how it should be! It was easy and painless, right? People usually think the concept of asking for a paystub is an inconvenience and unnecessary.. It’s easy to do and verifies income.. simple!
