Jan. 7, 2013 – NAFCU’s Tessema Tefferi on Friday lodged strong support for a CFPB proposal to allow a card issuer to consider shared income when evaluating credit card applications, restoring stay-at-home spouses’ ability to obtain credit on their own.
In a comment letter, Tefferi, NAFCU’s senior regulatory affairs counsel, said this current Regulation Z provision “irresponsibly and unjustifiably disenfranchises as many as one-third of stay-at-home spouses and, consequently, their families.” He said the bureau “should move swiftly” to finalize the rule and make it effective immediately.
Tefferi also urged that the bureau specifically address the rule within the context of secured credit cards.
Reg Z currently requires a credit union to consider a member’s independent ability to repay for a share-secured credit card. “As the CFPB may know, secured credit cards are often provided to consumers in credit repair situations,” he wrote. “[A] debtor’s ability to repay is secured by the assets . . . , essentially diminishing, if not extinguishing, any need for an independent ability-to-repay analysis.”
The proposal would reverse a rule change made by the Federal Reserve Board in 2010 that specifically bars card issuers from considering joint checking or savings accounts when reviewing credit-card applicants’ ability to repay. NAFCU urged against this change early on and has continued to press the issue with the CFPB and lawmakers.