Consumer Comeback Blog

CFPB to Challenge Rule Denying Credit to Stay-At-Home Spouses

The number of stay-at-home men is on the rise, but a basic study of consumer behavior will tell you that women most frequently control the majority of household spending in the United States. That hasn’t stopped the Federal Reserve from implementing rules about who can apply for credit cards in single-income households.

Nearly a year after the Federal Reserve Card Act Rules made it more difficult for non-wage earners to apply for a credit card, the Consumer Financial Protection Bureau plans to propose a new rule to even the credit playing field.

Designed to prevent college students from applying for credit using their parents’ income information, the rule requires creditors to issue cards based solely on individual income rather than household income. The rule has now relegated many stay-at-home spouses to only use credit under their wage-earning spouse’s name, even in houses with joint bank accounts and fully shared finances, and even if the applicant has perfect credit.

Opponents to the rule have expressed concern that the rule prevents non-wage earners from establishing credit for themselves. In some cases of domestic violence, the rule could make abused spouses even more financially dependent on wage-earning abusive spouses. Access to credit could help a spouse leave an abusive relationship.

The rule prompted stay-at-home mom Holly McCall to launch a petition on Change.org that eventually earned more than 33,000 signatures.

“It’s 2012 and I have to ask my husband to get my own credit card,” McCall said in a statement released to the media. “I make 95% of our household purchases, and have a nearly perfect credit score but under these new rules, my application for a credit card is denied.”

McCall’s petition was reviewed by the CFPB in April. The CFPB is currently reviewing the rule and plans to present a new rule to Congress in November.

“After gathering information and input from the public this summer, “we have determined that it is a significant problem,” CFPB Director Richard Cordray said at a Congressional hearing. “There are tens — and perhaps hundreds — of thousands of individuals who perhaps have been denied access to credit as a result of the way the law was interpreted.”

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