CFPB Proposes to Remove Independent Ability to Repay Requirement for Credit Card Applicants Who Are 21 or Older

October 22, 2012

On August 17, 2012, the Consumer Financial Protection Bureau (CFPB) issued a proposal to amend Regulation Z, which implements the Truth in Lending Act (TILA) and the official interpretation to the regulation, which interprets the requirements of Regulation Z. Regulation Z generally prohibits a card issuer from opening a credit card account for a consumer, or increasing the credit limit applicable to a credit card account, unless the card issuer considers the consumer’s ability to make required payments under the terms of such account. Under existing rules, a card issuer may only consider the individual card applicant’s income or assets. The CFPB requests comment on proposed amendments that would remove the independent ability-to-pay requirement for consumers who are 21 or older.

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