These days, there are significant consumer protections in place for Americans, but at least one segment of the population might have a little trouble as a result of the increased safeguards against predatory or misleading lending practices.
One of the provisions of the Credit Card Accountability, Responsibility and Disclosure Act required lenders to consider individuals’ income when they apply for a credit card so as to ensure they can afford their payments, but this has been problematic for many stay-at-home parents, according to a report from CNNMoney. Stay-at-home parents who rely on their partner’s income to cover their expenses might have need of a credit card in their own name, but will be denied unless they can prove to lenders that they have their own source of income.
Experts have noted that one way around this problem is for stay-at-home parents to open a card with their partner’s name on it as well, but this can be concerning for a different reason. For instance, if the couple were to separate or divorce, having both partners being co-signers on the same account can create friction and even financial problems, regardless of the intentions with which they entered into the agreement.
Further, for those who stay at home to raise their kids, not having a credit card in their own name can be problematic because it might adversely affect their credit standing.
As a result of these problems, there has been some amount of pushback from stay-at-home parents, who are now campaigning and petitioning federal agencies to change the rules so that those who do not have their own income might, under special circumstances, be able to get credit cards in their own name, the report said. Already, the federal Consumer Financial Protection Bureau, which oversees the lending industry and is in charge of enforcing the Credit CARD Act, says it is examining the way the current rules affect stay-at-home parents.
“We recognize that stay-at-home spouses have significant financial responsibilities and play an important role in the U.S. economy,” CFPB spokeswoman Jen Howard told the news agency.
Overall, these federal protections have been a boon to consumers, but the CFPB has proposed a number of changes and new rules that will better serve Americans in how they deal with their finances going forward.
Image: Leonid Mamchenkov, via Flickr