Stay At Home Spouses May Soon Be Able to Get Credit On Their Own – An Update

Recently the Consumer Financial Protection Bureau (CFPB) announced it will propose changes to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 and Federal Reserve regulations that critics have charged could bar stay-at-home mothers from obtaining credit cards. Today a non-working spouse cannot get a credit card because she or he doesn’t get a paycheck, despite possibly having free access to the household’s income. The agency will propose the rule before Congress reconvenes after the election. This change would affect all major credit card issuers in a positive way.The individual income requirements of the CARD Act and the Federal Reserve’s subsequent directives ignore how household economies work, especially those that have one working spouse and one spouse getting a paycheck.  And, many non paid spouses have ready access to their household’s income. In some cases the inability to apply for in-store credit card offers causes the consumer to pay more for goods because they don’t enjoy the common 10-20% discounts offered by retail credit card issuers.

And don’t get me wrong, this isn’t a criticism of the credit card issuers.  They’d love to continue to extend credit to non paid spouses but the law prevents them from doing so.

• Removing the individual income requirements is a common sense alternative to the CARD Act’s punitive individual income requirements that pretend only working people deserve access to credit card products.

• This is being positioned as a stay-at-home-mom issue because of the disproportionate impact on women. While that’s completely true, it’s more accurate to call this a stay-at-home-parent issue as it impacts either gender the same way.

• This is a smart move by the CFPB and is an example of common sense rule making. Lawmakers who were anchored to the individual income requirement were out of touch with the reality of how most household economies operate.

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.