When Congress passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act in 2009, its intent was to protect consumers. But a specific rule in the act could end up actually hurting a segment of the population in desperate need of protection.
Some said the rule will make it especially difficult for some stay-at-home parents and victims of domestic violence to obtain credit cards.
To clarify some of the provisions in the CARD act, the Federal Reserve has imposed a rule barring credit card companies from using household income to consider someone for a credit card. Under the rule, only an individual's own salary or income can be considered when applying for a credit card.
"Prior to this ruling, which takes effect October 1 of this year, they were able to use the household income in order for that stay-at-home parent to be able to get a credit card in their name only," said Scott Mead, of the Family Services Center in Huntsville.
"It'll definitely hurt some folks in that situation. Just as an example, any stay-at-home parent, typically, they're not going to have any income,"said Mead.
Susan Campbell is the definition of a survivor, having suffered a childhood of abuse at the hands of her father, until she, her mother and brother worked up the courage to leave when Campbell was 17. She agrees that the new rule could hurt women like her mother who are trapped by a violent, controlling spouse.
"I think it would definitely make things harder, especially if you were in a situation like ours, where you don't have your own identity," said Campbell.
Campbell now serves on the board of directors of Safe Place, a shelter for victims of domestic violence in the Shoals.
At the Family Services Center, Mead helps low-income families make budgets and establish and repair their credit histories. The FSC, through a grant from All state, also runs a financial counseling program for domestic violence victims at Hope Place - a shelter in Madison County. Mead said it's a way to give victims the tools they need to remain independent and stay away from their abusers.
"We all need a credit history. You know and a positive credit history in that, to be able to buy a house. To get a credit card, to get financing for something they may not be able to pay for in cash," added Mead.
As a survivor of domestic violence, Campbell said she learned firsthand how important it is to have a plan.
"When I talk with ladies that are trying to get out and when my mom talks with ladies, you've got to have that plan, because it can happen in an instant. We help give you the knowledge of where you can go, what you can do. And let you make those decisions," added Campbell.
The rule is scheduled to go into effect in October, but there is still a chance of changing it. The CARD act also created the Consumer Financial Protection Bureau (CFPB), an entity where people can voice their concerns about any financial products or services. Consumer groups say if enough people contact the bureau about this issue, they may reconsider this rule.
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