Credit CARD Act Threatening Easy In-Store Credit Applications?

Consumers may hear fewer requests to open store credit cards if the Federal Reserve fully implements new regulations under the Credit CARD Act in February. According to a report in the Wall Street Journal, retailers that process in-store credit card applications may have to start asking customers for proof of income. Currently, credit reporting bureaus supply the data required to approve credit instantly at the register. However, that data does not include actual proof of verified income from salaries, business ownership, or support payments.

To remain in compliance with new banking regulations, lenders must verify a consumer's ability to repay debt before opening a new line of credit. Retailers worry that shoppers will be less likely to turn over personal financial details to a store cashier, especially in light of recently uncovered credit card skimming operations. Representatives for major retailers told Journal reporters that their credit operations should be exempted from Credit CARD Act regulations because of their reduced risk. Lawmakers, though, have already targeted partnerships between lenders and retailers as a primary source of credit defaults.