NEW YORK (Credit.com) — In the past, many stay-at-home spouses across the country had difficulty getting a credit card in their own name thanks to a provision from a law designed to protect them. But recently, federal Consumer Financial Protection Bureau proposed a rule it says will make “common-sense” changes to the rule.
A provision of the Credit Card Accountability, Responsibility and Disclosure Act mandates that lenders may only consider an person’s income when determining whether they qualify for an account. Many experts and advocates argue this unfairly locks out stay-at-home spouses because they may not have their own income, a CFPB report said. That can cause major problems in the event of the death of or separation from their wage-earning partner, because it can limit their borrowing history and lock them out from some lines of credit.
Anecdotal and actual evidence compiled by the CFPB shows that millions of people across the country may have been denied for lines of credit despite their ability to afford payments. The U.S. Census Bureau found that more than 16 million married Americans don’t work outside the home, meaning about one in every three marriages has a stay-at-home spouse.
Consumer groups and other experts lobbied the CFPB for several months to change the rule for stay-at-home spouses.
The proposed rule change will allow all consumers over the age of 21, regardless of marital status, to list the income of a person to whose money they have a “reasonable expectation of access” on their credit card application, the report said.