Congressman Spencer Bachus (AL-6) today criticized a new federal regulation that could prevent stay-at-home moms and other spouses who earn less than their husband or wife from qualifying for credit.
Bachus called the rule "discriminatory" during a House Financial Services Committee subcommittee hearing today. Bachus, who is chairman of the full committee, said he supports proposed legislation that would protect stay-at-home moms and other responsible users of credit who could be affected by the sweep of the legislation.
"No one imagined that the regulators would draft rules that discriminate against stay-at-home spouses. No one imagined that moms and dads who stay home to take care of their children while their husbands and wives go off to paid jobs would be denied access to credit because of their choices. We must change the rules," stated Bachus.
The Federal Reserve rule requires lenders to consider individual rather than household income when determining whether someone qualifies for a credit card. Prior to the rule, which was mandated by the 2009 Credit Card Accountability, Responsibility and Disclosure (CARD) Act, stay-at-home spouses could take out credit cards in their own names by citing household incomes.
The Fed has acknowledged that its rule could prevent a consumer without an independent income from opening a credit card account even though the consumer has access to the income of a spouse.
The authority to amend and enforce the Federal Reserve's rule is now held by the Consumer Financial Protection Bureau, which sent a witness to the hearing.