Stay-At-Home Spouses and the “Ability to Pay” Rule

Recently, Senator Gillibrand and I sent a letter to the Consumer Financial Protection Bureau (CFPB) requesting that it study the effects of the Federal Reserve’s “Ability to Pay” rule. As part of the Credit CARD Act of 2009, the Federal Reserve was required to issue a rule  to prevent young credit seekers, such as college students, from acquiring debt that they would not be able to pay back. Unfortunately, the Federal Reserve's rule goes beyond the CARD Act’s requirements and may have unintended negative consequences.

Stay-at-home spouses with a household income but no personal earnings may be denied credit without the co-signing of their spouse. This inconveniences a stay-at-home spouse who applies for credit at a store without his or her spouse present. Worse, it could endanger or restrict a stay-at-home spouse in an abusive relationship by making it difficult to open or maintain a separate line of credit. The legislators who passed the CARD Act expressed these concerns to the Federal Reserve when it was considering this rule. I have urged the CFPB and the Federal Reserve to examine the ramifications of the Ability to Pay rule for the first year after its implementation and to report its findings to Congress. If it is found that stay-at-home spouses have been negatively impacted, the rule should be amended to correct any problems.