Eased credit-card rules proposed for stay-home spouses

WASHINGTON -- The federal consumer protection agency proposed on Wednesday to update an existing regulation that has been criticized for unintentionally preventing stay-home spouses and others from obtaining credit cards.

The Consumer Financial Protection Bureau proposed to allow such spouses and partners to rely on shared income when applying for a credit card account.

The proposal addresses a provision of the Credit CARD Act, which became law in 2009, that requires companies to consider an applicant's ability to pay before issuing a credit card.

The Federal Reserve, which was first charged with implementing the law, interpreted the provision to mean companies could not consider total household income and would have to deny cards to applicants who did not have their own source of outside income.

Lawmakers have since said they did not intend that when they passed the law, but a proposed legislative fix has faced a tough road through a gridlocked Congress.The agency said in releasing the proposal it had received data that suggested some otherwise creditworthy individuals have been declined for credit card accounts, and further discussions with industry indicated that some of them may be stay-at-home spouses with access to income from employed spouses.

The proposed revision would let applicants who are 21 or older rely on third-party income to which they have a "reasonable expectation of access."

Census data shows that over 16 million married people do not work outside the home, the CFPB said.

In a news release, agency director Richard Cordray called the proposal "common sense changes."