CFPB Finalizes Amendments and Official Interpretations to Regulation Z 

On April 29, the CFPB published a final rule to the Federal Register revising Regulation Z and related commentary. 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 the required payments under the terms of such account.

Prior to this amendment, Regulation Z required that issuers consider the consumer’s independent ability to repay, regardless of the consumer’s age. The final rule however, amends Regulation Z to remove the requirement that issuers consider the consumer’s “independent” ability to pay for applicants who are 21 or older, and permits issuers to consider income and assets to which such consumers have a reasonable expectation of access. The CFPB believes these amendments will make it easier for spouses or partners who do not work outside of the home to qualify for credit cards. 

The final rule has four main elements for credit unions to consider:

  1. The final rule generally removes references to an “independent” ability-to-pay standard from 1026.51(a)(1) and associated commentary. As a result, credit unions are no longer required to consider whether members age 21 or older have an “independent” ability to repay, only the member’s ability to repay.
  2. In determining the ability to repay, the final rule permits credit unions to consider income or assets to which an applicant or accountholder who is 21 or older, has a reasonable expectation of access.
  3. The final rule continues to require members under the age of 21 without a cosigner or similar party who is 21 years or older have an independent ability to pay.
  4. The final rule clarifies that application of the independent ability-to-pay standard to consumers under 21 years of age, consistent with Regulation Z, does not violate the Regulation B prohibition against age-based discrimination.

The final rule takes effect on April 29 and credit unions will have six months to comply with the new regulation. The final rule is available here.


Submissions to Monitor may be emailed. Bryan Laviolette is the editor of Monitor. Contact him by email or call (800) 262-6285, ext. 233. The newsletter of the Michigan Credit Union League is published Monday mornings or Tuesday mornings when Monday is a holiday. There is no Monitor the week after Christmas and the week after the Annual Convention and Exposition. The MCUL reserves the right to edit submissions for clarity and space.
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