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June 7, 2012 – Gail Hillebrand of the Consumer Financial Protection Bureau told lawmakers Wednesday that, presuming it comports with the Credit CARD Act, the bureau could reverse a current rule that makes it difficult for stay-at-home spouses to obtain credit on their own.

Hillebrand, the CFPB's associate director of consumer education and engagement, was testifying before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. The hearing was held specifically to address the "ability to pay" provision of the Credit CARD Act.

NAFCU President and CEO Fred Becker, in advance of the hearing, noted concerns in a letter to subcommittee Chairman Shelley Moore Capito, R-W.Va., and Ranking Member Carolyn Maloney, D-N.Y., about the rule's negative impact on one-income households. He said this "undoubtedly" will have an impact on credit unions and their members.

Capito and Maloney were in agreement yesterday that the current rule, included in Regulation Z, has an adverse impact on stay-at-home parents. So did other hearing witnesses, including Ashley Boyd, campaign director for MomsRising. The group last month announced having collected more than 45,000 signatures on a petition asking the bureau to reverse the rule.

Capito said the rule is particularly troublesome for military spouses, since servicemembers who are deployed cannot be around to sign credit applications. Maloney said the rule also makes it difficult for spouses in divorce or abuse situations to build credit histories or qualify for jobs.

Maloney told Hillebrand that the CFPB does have the authority to fix this rule without any change to the underlying statute. Hillebrand said she agreed, as long as the revision would be consistent with the CARD Act.

The CFPB reopened the rule for comment in December, two months after it took effect. Hillebrand told lawmakers the bureau is going through some 500 comment letters received in response to that notice and will make a decision this summer.

In other hearing discussion, Maloney commented to a National Retail Federation witness that consumers report seeing no savings now that retailers are paying lower debit interchange fees under Dodd-Frank Act interchange rules.