January 4, 2013
Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
700 G Street, N.W.
Washington, D.C. 20220
RE:Docket No. CFPB-2012-0039; Credit Card Ability-to-Repay
(Spousal Exception)
Dear Ms. Jackson:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I write to you regarding a proposed rule to amend Regulation Z’s provisions on a consumer’s independent ability to repay issued by the Consumer Financial Protection Bureau’s (CFPB). See 77 Fed. Reg. 66748 (November 7, 2012).
The proposed rule would amend the current ability to repay rules under Regulation Z, which prohibit a credit card issuer from opening a credit card account for a consumer without considering the consumer’s independent ability to repay. Further, under the current rule, the borrower’s ability to repay does not allow a card issuer to consider joint checking or savings accounts, thereby disqualifying many stay-at-home spouses. The proposed rule would remove these prohibitions, allowing card issuers to consider shared income and consequently allowing stay-at-home spouses increased opportunity to obtain credit.
NAFCU strongly supports the proposed rule. In fact, we have long urged the Board of Governors of the Federal Reserve System and the CFPB to address this issue, as the current rule irresponsibly and unjustifiably disenfranchises as many as one-third of stay-at-home spouses and, consequently, their families. Thus, we agree with the CFPB that the proposed rule constitute a “common sense” change. The CFPB should move swiftly to finalize this rule with an immediate effective date.
NAFCU would like to take this opportunity to strongly encourage the CFPB to specifically address the rule requiring an independent ability to repay in the context of secured credit cards. Currently, Regulation Z requires a credit union to consider a member’s independent ability to repay for a share-secured credit card. Secured credit cards are, however, often provided to consumers in credit repair situations. As such, a debtor’s ability to repay is secured by the assets (i.e., shares, in the credit union context) should diminish, if not extinguish, the need for an independent ability-to-repay analysis.
NAFCU appreciates the opportunity to comment on this proposed rule. If you have any questions or concerns, please feel free to contact me at (703) 842-2268 or ttefferi@nafcu.org.
Sincerely,
Tessema Tefferi
Senior Regulatory Affairs Counsel