The changes allow credit unions and other card issuers to consider income and assets that consumers age 21 and over have reasonable expectation of access to. For borrowers younger than 21, issuers are required to consider their independent ability-to-repay.
Issuers can either choose to establish policies that account for income and assets, or they can choose to limit consideration of income and assets to the consumer’s independent income and assets.
Issuers are prohibited from opening a credit card account for a consumer under an open-end credit plan or increasing a credit limit on such an account unless the issuer considers the borrower’s ability to repay.
Reasonable policies and procedures include consideration of the debt-to-income or debt-to-asset ratios, as well as net income.
While credit unions do not have to consider a consumer’s reasonable expectation of access to income and assets, NAFCU said the provision could “leave…credit union[s] at a competitive disadvantage compared to other lenders.”