Stay-At-Home Spouses and Partners To Soon Enjoy Easier Access To Credit

Stay-at-home spouses and partners should soon find it easier to get a credit card. Following through on changes originally proposed last fall, the Consumer Finance Protection Bureau just issued a final rule to amend Regulation Z, which implements the Truth in Lending Act. Under the amendment, credit card issuers are no longer required to consider a consumer’s independent ability to repay a debt. Instead, issuers are once again allowed to consider income and assets that an applicant, who is 21 or older, has a “reasonable expectation of access.” This means that consumers should soon be able to apply for credit based on household income once again.

The rule is a reaction to one of the unintended consequences of the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). While one of the goals of the CARD Act was to protect students from more debt than they could handle, it also made it more difficult for stay-at-home spouses to obtain credit. According to the CFPB, more than 16 million married people do not work outside the home and it figures that one out of three married couples should have easier access to credit under this new revision.

The use of “partners” in the rule change also means the changes apply to gay couples as well. According to the bureau, the new rule applies to all applicants, regardless of martial status.

The final rule, in its entirety, can be found at this link. After its publication this week, credit card issuers will have six months to comply with the new regulation.