The Consumer Financial Protection Bureau will propose changes to regulations that critics have charged could bar stay-at-home mothers from obtaining credit cards, its director, Richard Cordray, said today.
“We will need to engage in rulemaking. We have made a determination to proceed,” Cordray said at a hearing of the House Financial Services Committee.
He said the agency would propose the rule before Congress reconvenes after the election. It could affect major credit card issuers such as Capital One Financial Corp., JPMorgan Chase & Co. and Bank of America Corp.
The plans stem from an effect of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which governs how card issuers consider applications from non-working spouses.
The Federal Reserve, which wrote the first regulations under the law, stated that a card issuer may not determine a customer’s ability to repay by relying on income or assets of a person who is not liable for the debt unless the applicant has an ownership interest in the other person’s assets or income.
Members of Congress including Representatives Carolyn Maloney, a New York Democrat, and Shelley Moore Capito, a West Virginia Republican, have argued the rule could limit the ability of non-working spouses to get credit. Holly McCall, a former employee of Capital One and subsequent non-working spouse, started a petition against the rule.
Cordray said he largely agreed with their assessment.
“We have determined that it is a significant problem,”Cordray said. He added that “tens if not hundreds of thousands” of Americans have been denied access to credit as a result of the rule.
Cordray said the bureau concluded a regulation — rather than a clarification or change to the law — was needed after months of gathering information and data from the credit card industry. The CFPB solicited public input during a six-month period ending in June, in which it sought comment on possible changes to regulations it inherited from other agencies.