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Established Contributor
cashnocredit
Posts: 1,012
Registered: ‎07-18-2009
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Oh my! Seriously wrong WSJ article

http://online.wsj.com/news/articles/SB10001424052702303482504579177741736226518

 

"Credit-card issuers now must consider household income, rather than individual income, for someone applying for a credit card under his or her own name..."

 

Household income is only allowed if people have reasonable access to it AND if the lender allows it. Lenders are absolutely NOT required to do this let alone use general terms such as "household income." Lenders are permitted to request individual income.

 

 

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so my moniker is, well, rather out of date.

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Duncanrr
Posts: 2,841
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Re: Oh my! Seriously wrong WSJ article

[ Edited ]

And people wonder why newspapers are dying?

 

Edit: I know it's national media but still has a slant of politics.  --Rev



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colinstu
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Re: Oh my! Seriously wrong WSJ article

How are lenders not required to do this? The CARD Act which creditors must follow has been amended with this change.

 

This is an amazing change! 

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Cleanmachine
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Re: Oh my! Seriously wrong WSJ article

I am not sure what you mean regarding your Subject: (Oh my! Seriously wrong WSJ article)

 

But, the CFPB says, the law led to "otherwise creditworthy individuals" being declined for cards. Data from industry participants, the bureau says, suggest "that a significant number of [affected] individuals may be stay-at-home spouses or partners with access to income from an employed spouse or partner."

 

So in April the bureau approved an adjustment to the restrictions that took effect on Monday

.

Credit-card issuers now must consider household income, rather than individual income, for someone applying for a credit card under his or her own name, says Janna Herron, credit-card analyst at Bankrate.com.

 

Among those now eligible for credit are stay-at-home spouses (and those with similar arrangements), as well as college kids still dependent on their parents—as long as the parents are creditworthy.

 

Established Contributor
cashnocredit
Posts: 1,012
Registered: ‎07-18-2009
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Re: Oh my! Seriously wrong WSJ article


Cleanmachine wrote:

I am not sure what you mean regarding your Subject: (Oh my! Seriously wrong WSJ article)

 

But, the CFPB says, the law led to "otherwise creditworthy individuals" being declined for cards. Data from industry participants, the bureau says, suggest "that a significant number of [affected] individuals may be stay-at-home spouses or partners with access to income from an employed spouse or partner."

 

So in April the bureau approved an adjustment to the restrictions that took effect on Monday

.

Credit-card issuers now must consider household income, rather than individual income, for someone applying for a credit card under his or her own name, says Janna Herron, credit-card analyst at Bankrate.com.

 

Among those now eligible for credit are stay-at-home spouses (and those with similar arrangements), as well as college kids still dependent on their parents—as long as the parents are creditworthy.

 


The CFPB did say this

But, the CFPB says, the law led to "otherwise creditworthy individuals" being declined for cards. Data from industry participants, the bureau says, suggest "that a significant number of [affected] individuals may be stay-at-home spouses or partners with access to income from an employed spouse or partner."

 

But they did not say this:

 

Among those now eligible for credit are stay-at-home spouses (and those with similar arrangements), as well as college kids still dependent on their parents—as long as the parents are creditworthy.

 

The WSJ made that up out of whole cloth and appear to have mixed up joint accounts with individual accounts. For instance the parents creditworthiness has nothing to do with an individual application, only joint applications, and they have long been available to people under 21. The statement is flawed just from that pov.

 

 

As for the CFPB ruling:

If a lender asks for "household income" and an applicant is under 21 they must investigate further, IOW, they cannot relay on that alone. If a lender asks merely for "income" they may rely on that even if the person is under 21.

 

From the CFPB's final ruling on pag 81.

For example, card issuers may rely without further inquiry on information provided by applicants in response to a

request for “salary,” “income,” “personal income,” “individual income,” “assets,” or other

language requesting that the applicant provide information regarding his or her current or

reasonably expected income or assets. However, card issuers may not rely solely on information

provided in response to a request for “household income.”

 

It's a rather tortuous ruling and rather amusing in light of the fact that a lender can just ask for "income" and assume the answer is valid for everyone.

 

The last offer I got from Discover just has a spot for "income" without any differentiation in questions based on age.

 

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 Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k
Established Member
Feather_Hat
Posts: 99
Registered: ‎12-12-2013
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Re: Oh my! Seriously wrong WSJ article

[ Edited ]

i actually came across this article and posted it to see how people think about it..

i should've read this forum first lol

anyway, to what i understand, it seems farily good since they are trying to get more people to apply for CC ?

and as far as i am concerned, many people put inflated/household income when applying for CC..

 

unless a person is applying for CL that's over 5k, i dun think lenders give much care about what the true indivisual income is, but rather focus on credit score, UTL and spending habits?...

thats how i see it =P but then of course, i am probably wrong lol

 

 

ps. last time i went to bank to apply for their credit card, the banker actually put my income higher then what i told her.

i didn't get approved anyway but i hear many stories that bankers actually put inflated income for their customer when app for CC..

 


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