The Federal Reserve-issued rule, which was intended to clarify the CFPB’s final regulations in the implementation of the Credit CARD Act, does not allow the consideration of household income when an individual applies for a credit card, according to The Huffington Post.
Keating said that not allowing the consideration of household income would lead to difficulties for stay-at-home spouses to obtain credit in their own names, as well as build a credit history absent the consent of their spouses.
“This impairs not only those who haven’t been in the workforce since marriage, but also careerists who take a hiatus to raise a family,” Keating said, The Huffington Post reports.
Keating said that stay-at-home spouses that are widowed or divorced may have their accounts closed or be denied new accounts.
“The practical effect is to underscore and promote the stay-at-home spouse’s dependence, making it more difficult for an abused spouse, for example, to exit the marriage,” Keating said, according to The Huffington Post. “This is not the result Congress intended.”
Keating said that the Credit CARD Act makes a distinction between those under 21 years of age, who are required to have an “independent” ability to repay, and those older than 21 years who must have simply “an ability to repay.”
“By requiring independent income for individuals older than 21, the rule ignores clear Congressional intent and sends the antiquated—and offensive—message that stay-at-home spouses with excellent repayment histories on a mortgage, student loan, car loan and even another credit card suddenly cannot be trusted with a new card,” Keating said, The Huffington Post reports.
Keating said that credit history and responsibility, not income, is the determining factor for lenders that are considering extending credit, ultimately keeping debt at manageable levels, adding that there is broad bipartisan support in Congress for the consideration of household income in credit card applications.
“The regulation should be consistent with Congressional intent and fair to our nation’s stay-at-home spouses,” Keating said, according to The Huffington Post. “It is only the right thing to do.”