Stay-at-home spouses no longer have to skirt federal rules when completing credit card applications, thanks to a new ruling from the Consumer Financial Protection Bureau. In a formal filing to the Federal Register, the CFPB clarified its position on whether spouses and partners without independent sources of income can reasonably expect to access joint savings and other funds. Under the amended rule, a non-working spouse can again state their total household income instead of just their personal income when applying for a new credit card.
2009's Credit CARD Act required banks to make lending decisions based on an applicant's ability to repay their entire potential balance in the event of a job loss or medical emergency. Lawmakers and consumer advocates intended for the new rules to help Americans make better borrowing decisions. However, the Credit CARD Act inadvertently closed off formal access to new credit cards for millions of people who manage households while their spouses or partners earn the bulk of their families' income.
Despite the Credit CARD Act's income requirements, the new rules don't specify exactly how banks should verify applicants' income. Most instant approval credit card offers rely on data collected from other creditors, leaving many stay-at-home spouses vulnerable to their own "thin credit files." Before the Credit CARD Act, an underwriter could verify a spouse's access to joint funds to approve a new account. After the new rules took effect, underwriters could no longer manually override their risk management policies to open a new account for a spouse with good credit but no independent source of income.
Petitioners like Holly McCall rallied tens of thousands of other stay-at-home spouses against the rule change. In a 2012 interview with CNNMoney, McCall decried the impact of the Credit CARD Act as "demeaning," requiring the one-time CEO to ask for her husband's permission to open a new credit card account. Months later, the CFPB released a call for comments on its proposed rule change. According to the CFPB, credit card issuers must follow the new, relaxed version of the stated income rule by the end of 2013.