Proposed Credit Card Rules Aid Spouses and Partners

The Consumer Financial Protection Bureau is proposing to make it easier for stay-at-home wives and husbands - as well as unmarried partners - to get credit cards.

The proposed rule change, announced by the bureau on Wednesday, would let spouses and partners, age 21 or older who don't work outside the home, apply for credit based on shared income.

“When stay-at-home spouses or partners have the ability to make payments on a credit card, they should be able to obtain a card in their own name,” Richard Cordray, the agency's director, said in a prepared statement that also described the changes as “common sense.”

The move is an effort to fix an unintended consequence of the Credit Card Accountability Responsibility and Disclosure Act, known as the CARD Act, which became law in 2009. The law requires credit card issuers to evaluate an applicant's ability to make payments before opening a new credit card account. Under current regulations, issued by the Federal Reserve, a credit card issuer, in most cases, may only consider the individual applicant's income, even though the applicant has access to money the spouse or partner earns. (Previously, applicants could apply using total “household” income.)

The requirement was meant, in part, to protect students from getting into trouble with credit card debt, but it also ended up making it difficult for others to get credit cards. The agency's proposed fix would allow applicants who are 21 or older to rely on income “to which they have a reasonable expectation of access” when applying for a credit card.

Mr. Cordray, had indicated last month that the agency would soon make a proposal, but it was unclear how any change might affect same-sex couples. Since same-sex marriage is only recognized in a handful of states, the inclusion of “partners” in the proposed change is significant for gay couples, since the proposal doesn't rely o n marital status.

The proposal applies to credit card applicants “regardless of marital status,” the bureau said, but it expects that the change will especially benefit nonworking spouses or partners “who have access to a working spouse or partner's income.”

The agency is seeking public and industry comments on the proposal over the next two months. (One potential issue to be considered, according to the agency's proposal, is its impact on stay-at-home spouses who are under age 21.)

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