Credit Card Solution

Its not easy being a stay-at-home mom or dad. Childcare, homemaking, cooking… the list of chores and tasks is seemingly endless, and the hours are often punishingly long. These stresses can place such serious strains on relationships that they sometimes end in a break up.

At the moment, such strains can be alleviated by a sense of financial independence. The stay-at-home spouse or partner can have his or her own credit cards and functioning credit score, which can make the person feel less trapped and unhappy. And, if the worst does occur and the relationship ends, the process of breaking up is, in practical terms, made much easier by this financial independence.

Credit card regulation sometimes bonkers

All that could change this October if the Federal Reserve goes ahead and implements new rules that would see credit cards denied to those who cannot show that they have their own pay checks or other independent sources of income. On the face of it, this is a perfectly sensible move: keeping credit away from those who arent creditworthy is a good idea.

However, keeping it away from dependents who can manage the responsibility well is a bad one. Surely, its not beyond the wit of man (or woman) to come up with a rule that punishes the irresponsible without harming the responsible.

Credit card regulation sometimes good

Back on February 18, this blog posed the question: Is credit card regulation working? In answering, it referred to a report, then just published, from the Center for Responsible Lending that concluded that the Credit CARD act of 2009 had had few bad consequences and many good ones. And, earlier this week, it turned out (Credit card companies full of the joys of spring) that even card issuers themselves were pleasantly surprised by how little the 2009 law had affected their businesses.

That isnt, however, stopping them from waging a quiet war in Congress over the powers of their new regulator, the Consumer Financial Protection Bureau (CFPB). Credit card companies lobbyists are currently crawling all over the Hill, seeking to persuade legislators to extract the canines from the watchdog, which has so far scarcely barked, and is yet to gain the ability to bite.

Credit card companies lobbying paying off?

Some legislators have gone further, introducing bills that would neuter as well as de-fang the bureau. Writing on Tuesday on CNN Money, Abigail Field criticized these initiatives, saying:

Consumers need the help. When two businesses cut a deal, they negotiate a contract. When consumers buy products, they agree to a fine print contract they rarely read, much less have the power to negotiate. If the Consumer Bureau has the power to write tough rules, consumers will in effect have someone negotiating for them.

The Feds proposed rules that might deprive stay-at-home parents of their credit cards and credit scores show that regulation can have unforeseen consequences. However, theres evidence that it can also have very positive outcomes. The question is: Will legislators give the CFPB the chance to prove which it will deliver?

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