• Page :
  • 1
  • Text Only
Voting History
rated:
There was some discussion on here a while back about how the income verification requirements under the new law would require us to submit proof of income, such as W-2s, copies of Forms 1040, etc. I was skeptical in that discussion, and rightly so.

The Federal Reserve has released its amendments to Reg. Z resulting from the Credit CARD Act. The document is only 1,155 pages longs - I assume everyone here will want to read it.

Once you reach page 1,030, you'll see rule "51(a)(1) Consideration of ability to pay." Part 4 of that rule says, in part:A card issuer may consider the consumerís income or assets based on information provided by the consumer, in connection with this credit card account or any other financial relationship the card issuer or its affiliates has with the consumer, subject to any applicable information-sharing rules, and information obtained through third parties, subject to any applicable information-sharing rules. A card issuer may also consider information obtained through any empirically derived, demonstrably and statistically sound model that reasonably estimates a consumerís income or assets.

Okay, so the first line says that they can consider the HHI that I self-report. The last line says that they can use a statistical model. Let's combine those: I self report $100K in HHI, which according to a statistical model based on my credit report and ZIP code is within the range of statistical estimates. Consideration done.

Frankly, it doesn't sound that different from what card issuers should have been doing in the past, except that now they'll actually have to do it by law.

Member Summary
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
Thanks for visiting FatWallet.com. Join for free to remove this ad.

ThePessimist said: Once you reach page 1,030, you'll see rule "51(a)(1) Consideration of ability to pay." Part 4 of that rule says, in part:A card issuer may consider the consumerís income or assets based on information provided by the consumer, in connection with this credit card account or any other financial relationship the card issuer or its affiliates has with the consumer, subject to any applicable information-sharing rules, and information obtained through third parties, subject to any applicable information-sharing rules. A card issuer may also consider information obtained through any empirically derived, demonstrably and statistically sound model that reasonably estimates a consumerís income or assets.

m a y ???

They must consider the consumer's ability to pay. They have several different choices about what information that may use in that consideration. For example, they may choose not to use a statistical model. I guess given the wording, they may ignore our reported HHI too, although I can't imagine them doing choosing to do so.

It also mentions "consumer's income" not household income.

Yeah I think HHI is probably not going to be what it once was...

Given the way marriages work these days, HHI doesn't mean that much for unsecured credit providers if something goes wrong.

Torachan said: It also mentions "consumer's income" not household income.

Unless it SPECIFICALLY defines the term CONSUMER, I will continue to use HHI for both myself and for wife.... because OUR income is available to BOTH of us.

The corollary is that when your income drops (you become unemployed, etc.) the credit card companies will reduce your credit.

the bureaus are already developing incone estimate products for lenders to use on all of us... And the bad part is they arebt disclosing the number to us or giving us the ability to dispute it if inacurrate

I predict a class action



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014