Will New Credit Card Rules Hurt More Women Than Men?
New credit card rules the Fed is considering would prohibit banks from issuing cards to persons who do not have a source of income. This makes a lot of sense. It’s being pointed out though that the rules will prevent some women from getting a card and establishing credit in their own names.
- Rule would prohibit issuing credit cards to people without independent income
- Would prevent many stay-at-home moms or other women from getting cards
- Rule questioned by legislators, women’s advocates and card issuers too
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Income Requirement Has Disparate Impact on Women
In the law this is called disparate impact. The Fed’s rule applies equally to everyone by its terms. It’s assumed however that because more women than men stay at home and don’t work (temporarily or permanently), the rule will limit their access to credit compared with men. Of course the Equal Credit Opportunity Act prohibits gender-based discrimination.
So you have a well-intended rule that may negatively affect women. Women’s and poverty law advocates have expressed their concerns to the Fed. So have two members of Congress who were closely involved in drafting the Credit CARD Act, which the Fed’s rule is designed to put into practice.
The Fed’s proposing a one-size-fits-all approach to fix the ridiculous recent practice of issuing credit to "anyone with a pulse." What’s needed – and what can be implemented – is a flexible, common-sense approach to issuing credit based on the credit risk each individual applicant poses.
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