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CBA Comment Letter in Response to Proposed Card Act Rule Revisions
Dear Ms. Jackson:
The Consumer Bankers Association (CBA) appreciates the opportunity to submit comments in connection with the proposal to amend the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Card Act) rules, along with proposed revisions to the applicable official interpretations. Currently, these rules require credit card issuers to consider a consumer’s independent ability to pay, regardless of age. The Consumer Financial Protection Bureau (CFPB or Bureau) has proposed changes to these rules to remove this ―independent ability to pay‖ for consumers who are over the age of 21, which is consistent with the Card Act statute, and to replace it with a requirement to permit issuers to consider income to which consumers have a ―reasonable expectation of access.‖ CBA generally supports this proposed rule to facilitate the ability of certain consumers, such as stay-at-home spouses, to receive credit and offers the following comments that we believe will improve this proposal.
Summary of CBA’s Comments
- The proposal would allow credit card issuers to consider income to which the certain consumers have a ―reasonable expectation of access.‖ We support this approach that allows, but does not require, issuers to consider such income.
- Credit card issuers should be able to rely on application information for all of the Card Act ―ability to pay‖ provisions.
- Certain of the proposed official interpretations that apply to consumers over the age of 21 should also apply to those under the age of 21. These include the provisions allowing issuers to consider the collective ability of joint accountholders to make the required payments and the provisions allowing issuers to consider information that is provided by the consumer or reflected in a credit report.
- Under the proposal, whether an issuer could consider the income and assets of authorized users, household members, or other persons would in certain situations depend on whether a Federal or State statute or regulation grants the applicant an ownership interest in such income or assets. The official interpretations should specifically reference community property laws as one such example.
- The proposed examples of the consideration of income of household members are too limited. Specifically, these would limit consideration of income only to ―household members;‖ reference ―salary‖ and not other types of income; and some of the examples would limit this to the portion of salary used for ―the payment of household or other expenses,‖ which we believe is an unnecessary limitation.
The Ability of Issuers to Consider Income to which Certain Consumers have a “Reasonable Expectation of Access” Should Remain Optional
For consumers over the age of 21, the proposal would permit issuers to consider income to which the consumer has a ―reasonable expectation of access,‖ without specifically requiring issuers to consider such income. We support this permissive approach and request the CFPB include this in the final rule.
Card Issuers Should be Able to Rely on Application Information for all of the Card Act “Ability to Pay” Provisions
For applications when the applicants are over the age of 21, we wholeheartedly support the provisions of the proposal that will permit issuers to rely on application information with regard to an applicant’s income and assets, as well as the income to which consumers have a ―reasonable expectation of access,‖ without further verification. However, in situations when an applicant is under the age of 21, Section 1026.51(b)(1)(ii)(B) would require a cosigner, guarantor, or joint applicant to provide financial information for verification if the applicant does not have the independent ability to make the required minimum payments.
To read the full Comment Letter, download the PDF.