When the Credit Card Accountability Responsibility and Disclosure Act (“CARD Act”) was passed, it had the unintended (though entirely predicted in advance) consequence of shutting stay at home spouses out of getting their own credit.
It required that each borrower be evaluated on their own ability to repay, and as a consequence credit card companies no longer asked for household income on applications but instead asked for personal income.
Stay-at-home moms couldn’t get their own credit cards but had to rely on their husbands, they couldn’t build their own credit, the law carried the potential to re-institutionalize financial subjugation in such relationships.
The New York Times is reporting that the Consumer Financial Protection Bureau has published revised regulations which “lets spouses and unmarried partners who are 21 or older and don’t work outside the home, apply for credit based on shared income.”
The new rule “removes references to an “independent” ability-to-pay” when a credit card company evaluates an application and replaces it with a requirement that card issuers “consider the consumer’s ability to pay.”
The difference here is that it’s no longer necessary to look only at the income the individual has. Instead, a card issuer looks to the income that the individual “has a reasonable expectation of access” to.
Put another way, spouses — and, under this rule, domestic partners — can list household income on their credit card applications in order to qualify for credit.
Credit card companies will have six months to comply with the new rules. So spouses and partners will be able to show their combined income and not just individual income on their credit card applications in the coming months.