NRF: New regulations threaten ability of women to obtain credit

Washington, D.C. -- Federal regulations enacted last year potentially undermine a generation-old law guaranteeing women the right to obtain credit in their own names and need to be reconsidered, the National Retail Federation told a congressional committee on Wednesday.

“For many years, spouses – primarily women – could not get credit in their own names. Credit granters required a woman to have the signature of the ‘breadwinner’ before she could obtain credit, and credit was treated as if it belonged solely to the husband,” NRF senior VP and general counsel Mallory Duncan said. “Retailers would be very disappointed if this rule even inadvertently began to return us to those days of inequity.”

The House Financial Services Committee is scheduled to hold a hearing this afternoon on a provision of the 2009 Card Act credit card reform law requiring retailers and other card issuers to consider applicants’ ability to pay when issuing cards or granting credit increases. As written by Congress, the law requires that applicants under the age of 21 be asked to disclose their individual income rather than household income. The move was intended to help keep young people from becoming saddled with debt from cards they could not afford. But Federal Reserve regulations implementing the law in 2011 applied the requirement to all card applicants regardless of age.

Under the regulations, a stay-at-home spouse with no income of his or her own would effectively be unable to obtain credit or an increase in a credit limit without having the application signed by the income-earning spouse. In written testimony submitted for the hearing, NRF said that could be particularly difficult for individuals who are widowed, divorced or in an abusive relationship, or whose spouse is in the military and deployed overseas for extended periods. The Fed’s suggestion that they open joint accounts or become an authorized user on a spouse’s account “ignores the vital role these women play in their households.”


NRF has fought the income requirement as an example of the federal regulatory process gone awry, and believes the rules could undermine the Equal Credit Opportunity Act, a 1974 law giving women the right to obtain credit in their own name.

“The Federal Reserve rule has placed stay-at-home spouses in the untenable position of either lying about their independent income…or potentially being embarrassed in front of other customers when they are declined,” NRF said in its testimony. “The embarrassment of customers in stores is not good for customers, store employees or brands’ reputations.”

NRF urged that the newly formed Consumer Financial Protection Bureau, which now has jurisdiction over credit laws, revise the income requirement to reflect the intention of Congress that they be limited to card applicants under 21.