General Credit Topics

[ShiningDown]

Stay-At-Home Spouses Might Get Credit Cards

The Consumer Financial Protection Bureau plans on revising a rule that currently prevents many stay-at-home spouses from obtaining their own credit card.

A 2009 CARD Act provision currently mandates issuers look at a consumer's individual income, rather than their household income, when deciding to approve that consumer for a credit card. This has hurt the stay-at-home spouse that generates little or no income.

The rule originally tried to prevent young adults from using their parents' income to obtain a credit card and subsequently ringing up too much debt in their own name.

"This is clearly an unintended consequence," said Richard Cordray, the CFPB Director, at a congressional hearing yesterday.

Cordray said the CFPB would draft a proposal later this year

[Walt_K]

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ShiningDown wrote:

Stay-At-Home Spouses Might Get Credit Cards

The Consumer Financial Protection Bureau plans on revising a rule that currently prevents many stay-at-home spouses from obtaining their own credit card.

A 2009 CARD Act provision currently mandates issuers look at a consumer's individual income, rather than their household income, when deciding to approve that consumer for a credit card. This has hurt the stay-at-home spouse that generates little or no income.

The rule originally tried to prevent young adults from using their parents' income to obtain a credit card and subsequently ringing up too much debt in their own name.

"This is clearly an unintended consequence," said Richard Cordray, the CFPB Director, at a congressional hearing yesterday.

Cordray said the CFPB would draft a proposal later this year

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I love how he calls it an unintended consequence.  IIRC, the original proposal had an age limitation that was removed for some reason and people specifically pointed out that removing it would hurt stay-at-home spouses.  I thought the advocacy groups made that point before it became final, but maybe I am misremembering.

[RobertEG]

It will be interesting to see their proposed rulemaking.

It's a great move for those who dont have personal "income" due to family choices.

However, the devil is in the details...

Currently, the FCRA does not permit the pull of a spouse's credit report if the spouse was not a co-applicant, and thus did not "initiate the request for new credit."

If creditors are required to consider the income of a spouse, would they not also then legitimately be able to assert a need to evaluate that spouse's credit history as a risk factor?

I suppose a permissible purpose could arise under the "legitimate business purpose" section of FCRA 604, but I would also expect a splurge of complaints asserting inappropriate inquires where the spouse was not an actual party to the initiation of new credit.

The old and tired FCRA obviously did not contemplate such a situation, and thus does not deal with permissible purposes for pulling a credit report of a consumer who is not a party to a request for credit.

[my-own-fico]

I don't get it. If a loving couple engage in a joint marriage, have joint children, joint bank accounts, a joint house and joint who knows what and left and right, why is credit such as big deal? Maybe the problem is the underlying marriage model, in which one works and one stays at home. That's the way it was back in time when the woman stayed in the cave and the man went out hunting for food. That was well before any printed or virtual money. So many models are broken. Just take the distance between railroad tracks, which historicaly goes back two thousand years to the Roman horse carriages. Social security was primarily designed for retirement, but later wasn't just that. Why do people get health insurance through their work? And why does the closest thing to a nationally domestic ID for individuals have anything to do with cars? Of course half of all adults today aren't married, while 50 years ago about three quarters were. No one said much about credit cards for stay-at-home spouses then.