The newly-created US consumer watchdog agency, the Consumer Financial Protection Bureau, issued a revision of a policy initially adopted in 2009 in order to extend credit access to many people who have been cut off for several years due to qualifications for independent income.
Under the Credit CARD Act, a key stipulation of the bill was one that insisted that credit cardholders demonstrate viability to pay for purchases (proof of income) before being approved for a card. This led to many financial institutions denying credit applications for stay at home moms and other individuals who did not have independent income. Previously, people could claim household income as a form of liability.
In the aftermath of its passage, many lawmakers have expressed concerns with this interpretation, stating that the original scope of the law was not intended to target these individuals. Nevertheless, without the financial agency being officially online for nearly four years, financial institutions' hands were tied in terms of acting otherwise.
The new guidelines – issued by the director of the bureau, Richard Cordray - stipulate that any spouse or partner who can demonstrate that he or she has access to financial resources that will allow for the payment of the card in a timely fashion will be able to receive cards under the Credit CARD Act's provisions.
A fairly upset number of individuals made it their task to lobby and convince their lawmakers to persuade the bureau to review the initial determination. The sponsor of the bill, Representative Carolyn Maloney (D-NY), even made a plea last fall to the CFPB to consider the changes.
The CFPB was brought into existence formally by the 2010 Dodd-Frank reform law that sought to end abusive practices in banking and lending sectors. With its creation, implementation of the 2009 Credit CARD Act was given from the Federal Reserve to the CFPB.
Credit card companies have been instructed to follow these new provisions and will have six months to come into full compliance. This means a marked reversal from before: rather than being forced in essence to not offer these stay at home individuals access to credit, they will now be required to under appropriate circumstances.