Maloney, Slaughter call on Federal Reserve to revise proposed “ability to pay” rules implementing the Credit CARD Act to reduce impact on stay-at-home moms
WASHINGTON, DC – Reps. Carolyn Maloney (D-NY), principal author of the Credit CARD Act, and Louise Slaughter (D-NY), author of the law’s language aimed at curbing abuses aimed at those under 21 years of age, have called on the Federal Reserve to revise its proposed rule implementing the “ability to pay” requirements in the Credit CARD Act, which could curb the availability of credit to stay-at-home moms and other adults without certifiable income.
The lawmakers wrote, in a letter to the Federal Reserve, “We are concerned that the Board's proposal will hamper a stay-at-home mom's ability to establish her own independent credit history by applying independently for a card. Many stay-at-home moms have a strong work history, yet the proposed regulations ignore their demonstrated credit-worthiness because of their lack of current market income.”
"The CARD Act has two provisions regarding 'ability to pay': one directed at those under 21, which requires issuers to asses an applicant’s 'independent' ability to pay (so they cannot use their parents’ income to qualify) and another which requires issuers to assess an applicant’s ability to pay and does not specify that it has to be independent income. I believe the Federal Reserve has conflated the two in their proposed rule, and erred in requiring that all applicants provide independent income information," Maloney said.
“When we passed the landmark Credit Cardholder’s Bill of Rights, it was fundamentally about fairness to the average consumer,” said Slaughter. “While I was proud that my amendment to protect young adults was included in the legislation, we should remember that it was necessary because college students were targeted by credit card companies and too often falling into crippling debt. That provision should not be extended in a way that harms stay-at-home mothers. I urge the Fed to keep that in mind as they move forward.”
A copy of the Maloney/Slaughter letter to the Federal Reserve may be viewed here.
Maloney’s website devoted to the CARD Act is viewable here.
The CARD Act was signed into law by President Obama in May, 2009.