Regulation Z implements the Truth in Lending Act and prohibits credit card issuers from opening a consumer account or increasing a credit limit unless the issuer considers the consumer’s ability to repay under the account’s contract terms.
While Regulation Z generally require issuers to consider a consumer’s independent ability to repay regardless of age, TILA requires consideration of independent ability to repay only for applicants under 21 years of age.
The agency amended Regulation Z to remove the requirement that issuers establish a consumer’s independent ability to repay for applications 21 years of age and older.
Many industry groups, participants and consumer advocates have pointed to Regulation Z as limiting stay-at-home spouses’ access to credit because they have no independent income and would, therefore, be unable to obtain credit.
The change follows a call by the National Association of Federal Credit Unions to address the issue and allow card issuers to consider shared income when determining a consumer’s ability to repay.
“We have long urged the Board of Governors of the Federal Reserve System and the CFPB to address this issue, as the current rule irresponsibly and unjustifiably disenfranchises as many as one-third of stay-at-home spouses and, consequently, their families,” NAFCU said in a January letter regarding to the propose changes to Regulation Z. “Thus, we agree with the CFPB that the proposed rule constitutes a ‘common sense’ change.”