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Reps. Capito, Maloney and Slaughter hail CFPB proposal allowing stay-at-home spouses with access to family income to be issued credit cards in their own name

Rep. Shelley Moore Capito (R-WV), Chair of the Subcommittee on Financial Institutions and Consumer Credit, Rep. Carolyn Maloney (D-NY), principal author of the Credit CARD Act and Ranking Member of the Subcommittee, and Rep. Louise M. Slaughter (D-NY), Ranking Member of the House Committee on Rules, today hailed the announcement of a proposed rule by the Consumer Financial Protection Bureau (CFPB) that makes it easier for stay-at-home spouses to obtain credit cards in their own name under the provisions of the CARD Act.

“This is an excellent first step forward in solving the unintended consequence of otherwise credit worthy stay-at-home spouses being denied credit solely because they do not have an independent income. As I have said before, without a change, this rule could be especially punitive for women who are in a failing marriage or abusive relationship.   I look forward to hearing from all involved parties during the 60-day comment period established by the CFPB to ensure this is a workable solution,” stated Chairman Capito.  “I have thoroughly enjoyed working with Ranking Member Maloney and Congresswoman Slaughter throughout this process.  This is a clear example of the good that can happen when two sides work together.”

“I am so pleased that the CFPB has proposed this common sense clarification,” Maloney said. “It’s recognition of how modern families truly work. If a spouse stays at home, but participates in  a household’s financial decisions and has ‘reasonable expectation of access’ to the household income, then the spouse should be able to obtain a card.”

“Stay-at-home moms perform an invaluable service to our families and our nation,” said Slaughter.  “Women control more than $4 trillion in annual discretionary spending and make the majority of household spending decisions, yet a large segment of our population is hampered from establishing independent credit histories due to existing regulations.  This is also crucial for women who are trapped in dangerous, abusive relationships who have far fewer options if they lack an independent credit history. I am pleased that the CFPB has heard our concerns and is acting upon them.”

Under the proposal, “reasonable expectation of access” for a spouse can be determined in one of three ways:

1. A person’s salary is deposited into a joint account;

2. There are regular funds transfers to the non-working spouse’s account; or

3. The applicant receives the benefits of the income.

The CFPB had already determined that there was a negative impact on stay-at-home spouses based on the original Federal Reserve rule implementing this portion of the CARD Act. The CFPB made this proposed change based on data from a variety of sources indicating that those being denied credit cards were otherwise credit worthy-- meaning that but for the lack of independent income, they would have qualified for the card.

The Financial Institutions and Consumer Credit Subcommittee hosted a hearing in June entitled “An Examination of the Federal Reserve’s Final Rule on the CARD Act’s ‘Ability to Repay’ Requirement.”