Have you read about the CardACT legislation that went into effect, October 1, 2011?  If not, read up here:

The Federal Reserve’s rule told credit card companies that they no longer can consider household income when assessing the creditworthiness of an individual who applies for his or her own card. Under the rule, only an individual’s own salary or other income — rather than combined household income — can be considered.

One major effect of the new regulation: Stay-at-home moms (or dads) without significant outside income no longer will be able to open their own credit card accounts — and establish their own credit histories to build their credit scores. Compliance with the rule became mandatory Oct. 1, 2011.

Read more:

During the first few months that the new law went into effect, there was heated backlash against the Obama administration on the basis that it discriminates against women who happen to be stay at home parents (stay at home dads too) and women in abusive situations.  For the purpose of this article and to stay in line with the theme of this bog, I will focus on the effect on women.

The Backlash

Dissenters say that this law takes the women’s movement back 50 years because now women would be put in a position to ask their husbands or partners to get them a credit card.

Anisha Sekar, chief content manager and credit card industry analyst for NerdWallet.com, commented on LearnVest.com that this bill undermines the contributions of stay-at-home parents:

As far as I’m concerned, a stay-at-home mom works just as hard as (or harder than) her spouse—she just doesn’t file her income with the IRS. She is also likely to make the household’s financial decisions, from paying for groceries to saving for college to dealing with medical bills. So why is she relegated to second-class citizenship, a subordinate who can only get a credit card with her husband’s say?- Mommyish

I couldn’t disagree more and here’s why.

My Thoughts

Those are things mothers would do regardless of whether or not they worked a day job.  It comes with the territory of being a mom.  I value very much the work that mothers do in the home but the harsh reality that many of us seem to dodge intentionally, is that work in the home does not translate into a real paycheck that the bank can use in the event of a default.  This is not second-class citizenship, welcome to adulthood.   We can’t cry about inequalities and then balk when laws like this level the playing field.

The women’s suffrage movement worked hard so that women today would have the luxury of choice.  For the purposes of this article, that would be the choice to stay home or work a day job.  As with all choices in life, there are intended and unintended consequences.  Women all over the world who choose to work out of the home contend with spending more quality time with their children vs working to earn a living to support their family.  Women who choose to stay at home must wrestle with maybe one day having to return to the workplace and competing with others who have more current and up to date skill-sets given their absence from the job market.

No one likes to talk about this but those are the harsh realities of the choices we make as women.

There will always be unintended consequences that we struggle with in order to make this life we live in work.  What grates my feminist nerves is when I see women reacting to this new law as if they’re newly slayed victims on the gauntlet.

Choice vs Risk vs Consequences

Women make the choice to stay at home with their children and depend on their partner’s income.  That’s a decision they made, not this new law.  If you want to be able to get a credit card in your name, here’s a novel idea-get a job and earn your own money so that you can qualify on a credit application.  Harsh, I know, but it has to be said since so many news outlets seem to be coddling our egos by supporting the idea that we are the new victims as a result of this law.

The card act states that creditors must consider a consumer’s ability to pay before extending credit. The intent, says the Fed, is to keep consumers from taking on unaffordable debt. And to do that, the Fed concludes, credit should be granted based on the applicant’s income, not the income of someone who won’t be legally responsible to pay the card bills.-Baltimore Sun

I support the banks lending to consumers who have the individual ability to pay them back.  Would you lend $10,000 to an individual who has not demonstrated that they are able to pay back the debt?  Why would the banks and other lending institutions risk their capital by leveraging 1 salary twice?  Once for the wage earner and second for the person who does not?   What if you and your spouse separate?  Divorce?  Who does the bank go after now that you’re newly divorced with no job or maybe you have a new job and struggling to get back on your feet with kids to feed?  Choosing to stay at home is a lifestyle choice with the intended consequences as they were there before you decided to stay at home.

Let’s be serious ladies.  This law does not force you to ask your husband for a credit card.

1.  You don’t need a credit card

2.  If you want one, under this new law, you’ll need to get a job so that you have your own income and when you have your own income then you can get your own credit card.

3.  Toughen up.  This is why the women’s suffrage movement went down the way it did.  It resulted in many of us having choices that we did not have over half a century ago.  If we don’t like it then we have the choice to go back to work and get in line with the new law and the requirements.

4.  For the women in abusive relationships?  A credit card won’t help you get out.  Every situation is different, and a credit card isn’t the key that opens the door to freedom.  The carefully planned decision to leave will as the real problem is the attachment to their abuser which clouds their ability to craft an exit.

I could go on and on but I will leave you something I my mom taught me years ago:

“Women often work hard at teaching their children the art of being independent while abdicating that responsibility to themselves”

The reality is, the blog and news outlets that coddle you into being a victim do so because it gets them page views and social media mentions.  By encouraging this mindset, you never really think about the idea that you can earn your own money and if you choose, get a credit card in your name.  Once you do that, there is no story and we all carry on like happy and responsible adults.

Some of you may remember my post about Sallie Mae No Longer Consolidating Student Loans.

[The following was provided by Mark Kantrowitz and expanded by NASFAA.]

Updated List Of Lenders Changing Loan Practices

In the wake of the subprime mortgage market turmoil and lender subsidy
cuts by Congress, student loan providers are modifying their business
practices to adapt to a changing market. This following is a list of
lenders who have changed their practices due to the recent changes.
This list is a work in progress and NASFAA will continue to update it
as we receive and verify information. If you have heard of lenders
changing their practices and you don’t see them on this list or see
any inaccurate information on this list, please notify NASFAA by
emailing web@nasfaa.org. We will keep the list as up to date and
accurate as possible.

LAST UPDATED SEPT. 17, 2008

Loan Program Suspensions

Lenders suspending FFELP Loans include: 111 total

* A+ Funds/Medfunds (Graduate Level Loans)
* Abilene Teachers Federal Credit Union
* Academic Funding Group/Provincial Bank (#78 origination)
* Academic Financial Services
* Academic Loan Group
* Acapita
* Academic Finance Corporation
* Acccess Credit Union
* Affinity Direct/Educational Direct (#45 origination)
* ALL Student Loan (FFELP Loans outside California) (#43 origination)
* Amarillo National Bank
* American Education Services (AES)/PHEAA (#19 origination)
* Ardent Financial
* Bank of Lake Mills (#28 origination)
* Bank of Texas
* Bankers Trust
* Brazos Higher Education Service Corp. (Brazos Student Lending,
Academic Finance Corp., Educational Funding Services, Inc., Acapita)
* Boeing Credit Union
* Cadence Bank
* Campus Door
* Carnegie Student Loans
* Capitol Federal Savings, Kansas
* Capital One/Axiom
* City Bank Texas
* College Board (#25 origination)
* College Loan Corporation (#7 origination)
* College Solutions Network (#40 origniation)
* Collegiate Solutions
* Comerica Bank (#39 origination)
* Commercial Bank of Texas
* CoreFirst Bank
* Cornhusker Bank
* COSTEP
* Credit Union of Texas
* Cy-Fair Federal Credit Union
* Deutsche Bank Trust Company
* Education Credit Union
* Educational Funding Services
* F&M Bank and Trust Company
* Falcon International Bank
* Federal Student Loan Solutions
* FinanSure
* First Financial Bank, Eastland
* First Horizon Bank
* First Niagara Bank
* First Service Credit Union
* First United Bank
* FirstBank Southwest
* FirstMark Credit Union
* Freestone Credit Union
* Frost National Bank (#66 origination)
* GMAC Bank
* Goal Financial (#64 origination)
* Happy State Bank
* HCSB (state banking association)
* HSBC (#43 origination)
* Heights State Bank
* Hereford State Bank
* Independence Federal Savings Bank
* Independent Bankers Bank
* International Bank of Commerce (temporary suspension)
* K2 Student Loan Solutions
* Kansas State Bank
* Kentucky Higher Education Student Loan Corp./The Student Loan
People (suspended loans to first-time borrowers)
* Kleberg Bank
* Legacy Texas Bank
* Loanster Financial Group LLC
* M&T Bank (#40 orgination)
* Michigan Higher Education Student Loan Authority (MHESLA)
(temporary suspension)
* Mills County State Bank
* My Rich Uncle
* National Bank of Andrews
* National Education
* National Student Loan Group
* Northwest Savings Bank (suspending FFELP loans to first-time borrowers)
* Neches Federal Credit Union
* NextStudent (#59 origination)
* NorthStar Education Finance Inc. (# 11 origination)
* Northwest Savings Bank (for first-time borrowers)
* Plains Capital Bank (temporary suspension)
* Red River Federal Credit Union
* SAF-MT (Montana)
* San Antonio Federal Credit Union
* Security Bank of Kansas City
* Sovereign Bank
* Spokane Teachers Credit Union
* StarTrust Federal Credit Union
* Student Capital Corp.
* Student Loan Xpress
* SunTrust Education Loans – ONLY SUSPENDED IN TEXAS – (13 orginations)
* Tarrant County Credit Union
* TCF Bank (#44 origination)
* TD Banknorth
* Texas Bay Area Credit Union
* Texas Dow Employees Credit Union
* Texas Independent Bank
* Texas Rural Communities
* THE National Bank
* TierOne Bank
* Total Higher Education (T.H.E. Loan Program) (Temporary Suspension)
* Town and Country Bank
* Twin Cities Federal Bank
* University of Miami
* Urban Ed Express
* U.S. Education Loan Trust IV (#100 originations)
* Washington Mutual
* Weatherford National Bank
* West Des Moines State Bank
* Wichita Falls Teachers Federal Credit Union
* Widener University
* Zions Bank (#61 orignation)

Lenders exiting or suspending private student loans include: 33 total

* A+ Funds/Medfunds (Graduate Level Loans)
* Academic Funding Group/Provincial Bank
* Access Group
* Bank of America
* Bremer Bank
* Comerica Bank
* Commerce Bank
* Commercial Bank of Texas
* Campus Door
* College Loan Corp.
* Education Finance Partners
* FinanSure
* GATE Student Loan Program
* GMAC Bank
* HELP Alternative Loans
* IEFC
* Iowa Student Loan
* Kansas State Bank
* Loan to Learn
* MOHELA (Missouri)
* Michigan Higher Education Student Loan Authority (MHESLA)
* My Rich Uncle
* New Hampshire Higher Education Loan Corporation (NHHELCO)
* NELNET
* NextStudent
* Sallie Mae (Recourse Loans Only)
* ScholarPoint
* Student Loan Xpress
* TD Banknorth
* THE National Bank
* Urban Ed Express
* Wachovia (Undergraduate, Continuing Education)
* Washington Mutual
* West Des Moines State Bank
* Zions Bank

Lenders suspending or limiting only FFELP consolidation loans include: 31 total

* Access Group (#21 consolidations)
* Alaska Commission on Postsecondary Education (#97 consolidations)
* Bank of America (# 42 consolidations)
* Brazos (#19 consolidations)
* Citibank’s Student Loan Corporation (SLC) (#7 consolidations)
* CollegeInvest (#34 consolidations)
* Commerce Bank
* Commercial Bank of Texas
* GCO-ELF (#24 consolidations)
* Graduate Leverage (#11 consolidations)
* Iowa Student Loan (#26 consolidations)
* ISM Educ. Loans (Indiana) (#22 consolidations)
* JP Morgan Chase (#5 consolidations)
* Kentucky Higher Education Student Loan Corporation (# 43 consolidations)
* Loanster Financial Group LLC
* MHHELCO New Hampshire Higher Education Loan Corp (#63 consolidations)
* Montana Higher Education Student Assistance Corporation (MHESAC)
(#32 consolidations)
* MOHELA (Missouri) (#15 consolidations)
* M&I Bank
* NELNET (#2 consolidations)
* NextStudent (#3 consolidations)
* NorthStar/T.H.E. (#21 consolidations)
* NTHEA
* Regions Bank
* Sallie Mae (limiting FFELP consolidation activity)
* ScholarPoint (#53 consolidations)
* South Carolina Student Loan Coporation (#37 consolidations)
* U.S. Education Loan Trust IV (#35 fy consolidations)
* UHEAA
* Wachovia Education Finance (#16 consolidations)
* Wells Fargo (#8 consolidations)

Loan Program Expansions

Lenders expanding their loan programs: 11 total

Note: These lenders have notified NASFAA that they are looking to
expand their FFEL student loan portfolios, but some are expanding
selectively and refusing to lend to students at certain institutions.

* Citi Bank
* Discover Student Loans
* JP Morgan Chase
* National City
* OneSimpleLoan
* PNC
* Sallie Mae
* Student Funding Group, LLC (StuFund)
* Student Loan Network
* Texas Dow Employees Credit Union (TDECU)
* U.S. Bank

Please check with your lenders to make sure that your semesters through the end of Spring will be fully funded.  If possible, discuss any changes specifically with your financial aid administrator.