Today, the American Bankers Association submitted a letter supporting the CFPB's proposal to reconsider the FRB's interpretation of the TILA requirement that lenders consider the ability of the borrower to make payments before opening a credit card account. Under TILA, as amended, card issuers may only open credit card accounts to those with the "ability" to make the required payments, and, if the potential borrower is under 21, an "independent" means of repaying the obligation. Ignoring the distinction, Regulation Z currently requires that borrowers of all ages demonstrate an "independent" ability to repay a credit card obligation.
The ABA noted that the current regulation limited the ability of a stay-at-home spouse or partner or one working part-time to obtain a credit card and build a credit history without the consent of the other spouse or partner and applauded the CFPB's proposal to eliminate the requirement that those 21 or older demonstrate an "independent" ability to repay the obligation in order to obtain a credit card.
Read the full letter.
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