Thursday, April 14, 2011
Ryznar: "Underwriting Credit Cards, Overwriting Congress, and Rewriting Family Law: The Treatment of Household Income in Consumer Lending"
Margaret Ryznar has posted "Underwriting Credit Cards, Overwriting Congress, and Rewriting Family Law: The Treatment of Household Income in Consumer Lending" (forthcoming St. John's L. Rev.) on SSRN. Here is the abstract:
Remarkably, the Federal Reserve has proposed rules that would prevent stay-at-home mothers from opening credit cards in their own names. These rules would require credit card issuers to consider only a person’s independent income, and not the household’s income, when underwriting credit cards in an effort to protect young adults unable to repay debt. However, in addition to keeping credit cards away from young adults, the proposed rules would problematically do the same for a larger group of people: non-income earning spouses, constituted primarily of stay-at-home mothers. Given the possibility that the rules may have exceeded Congressional intent, and given the significantly negative effects of the Federal Reserve rules due to the importance of access to the credit card market - particularly in light of the historical exclusion of women’s participation in legal and economic affairs - the Federal Reserve’s proposed rules require immediate reconsideration. The final rules, or their amendments, should recognize the non-income earning spouse’s financial participation in the household.