Consumer Financial Protection Bureau Director Richard Cordray promised lawmakers on Thursday that the agency would take action on a credit-access issue that both Republicans and Democrats are in rare agreement on needs to be addressed: the availability of credit for stay-at-home spouses.
Cordray told lawmakers that after doing some research, the agency found that a rule it inherited from the Federal Reserve Board, which requires consumers to qualify for credit based on individual income, was denying credit access to “tens and perhaps hundreds of thousands of individuals.”
As a result the agency plans to propose a new rule before lawmakers return from recess to ensure that non-working spouses aren't unduly shut out of the credit market.
“We have determined that it is a significant problem,” Cordray said during a House Financial Services Committee hearing on the agency.
“We have made a determination to proceed. We are going to address this issue. Our proposal will be on the street in the very near future, certainly we think before you reconvene,” Cordray said.
Cordray said that the bureau did not believe legislation was necessary to make the change, but that whether to pursue legislation was up to Congress to decide.
“You’ll have an opportunity to look at that [draft proposal] and you may want to determine whether you want to proceed by legislation, or whether you want to work with us on a rulemaking process. But we do intend to address this issue and to resolve it,” Cordray said.
At a hearing that was otherwise punctuated by the ongoing debate between Republicans and Democrats over whether the agency has too much power, Committee Chairman Spencer Bachus, R-Ala., took an unusual step of praising Cordray.
“We appreciate the responsive answer. Sometimes we don’t always get those and I don’t mean from you personally,” Bachus said.
Both Reps. Carolyn Maloney, D-N.Y., a principal proponent of the consumer bureau, and Shelley Moore Capito, R-W.Va., the chairwoman of the Financial Services Committee’s subcommittee that oversees the CFPB, have pressed the agency to address credit-access concerns.
The banking industry has been lobbying for a change in the regulation, but some consumer-advocacy groups have defended the provision, saying it is necessary to ensure that consumers do not acquire more credit than they can afford.