Today a guest post from my good friend and a tireless advocate for women, Debra Levy. Here she explains why a largely unnoticed new regulation reinforces the old “he who earns it owns it” assumption rather than the remodeled “family income and wealth are the result of joint work—both family work and employment—so they are owned jointly by both spouses” – with chilling effect on mothers’ financial well-being.
MSNBC was onto something the other day in their piece Why Stay-At-Home Moms are Mad at the Fed.
Our regulators seem unaware of how families divide tasks or how women work, or even what they earn compared to men, and a new move by them may penalize women and erode progress on women’s access to personal credit.
It happens all the time. You go to a store whose merchandise you value, like and trust to make a family purchase, nothing for yourself. Jeans for your son. Underwear for your daughter, or loads of flooring for a home construction project at your area large box hardware store. You wait in line at the register and tick off the errands still on your list, that work email you have to fire off as soon as you leave the store.
You whip out your wallet to pay for your purchases and then the inevitable questions: debit or credit? Then, would you like to sign up for our [insert brand name] credit card and save 25% on today’s purchases?
I’ve done this once or twice. Store affinity cards can yield fabulous yearly discounts, exclusive to its members-debtors. Such cards are “marketing in a heart beat” for retailers, and sometimes they make our spending easier and more affordable.
Raise your hands, women and men of America, if you ever have opened a credit card account at a point of sale transaction? Now, think back. When you did this, did you list “household income,” or “personal” or “independent income?”I am guessing you put down the total, household income regardless of who earned the income. Your bills are paid as a household, and the money coming into your home is a shared resource. You may not be aware of this but last fall, the Federal Reserve proposed changes to the way Americans must apply for credit. No longer will issuers and retailers ask you for the amount of your “household income,” you will be asked, instead, to disclose “independent income.”
This change was to remedy against the hordes of college students who used Dad and Mom to bolster themselves through their college years. This provision and others were designed to reign in excesses.
Still, there is a chilling impact for women and for other partners whose earnings may be less than or non cash based within the family. Two income families where one spouse earns $43,000 as a computer technician and the other earns $20,000 as a teacher’s aide may find that credit may only be extended to the higher earning spouse under the Federal Reserve’s new rule. Or, credit will require a co-signer and not be in one’s own name alone – cramping the ability of women who are at risk for divorce and in the extreme – spousal abuse – to have a credit history in their own right.
What does this mean? Don’t we want credit to be tighter and the process for determining who gets it to be more rigorous?
Well, yes, but do we want to go back to the day when women could not get credit in their own names, where husbands had to vouch for their wives’ spending, or had no independent line of credit?
Retailers (Home Depot, Dress Barn and others) were apoplectic about this regulation. Why, it devalued the honored and storied role of women, and their role as caregivers. Women are veritable shopping carts of the family. But women make 76 cents to a man’s dollar, and tend toward part time work to accommodate their families. Retailers know all of that and they are scared of losing the “economic stimulus” of shopping women and moms.
Not so the Fed, and as far as my eye can see, women and women’s organizations did not seem to notice or make any comment. Watchdogs were mostly asleep because the regulatory process is, well, sleepy.
Surprisingly, the hue and cry about this regulation came from this cadre of retailers and their associations. The record of commentary on the proposed regulation reveals nothing from any major women’s organization or group.
Maybe for them it was one fight to leave to the business world. I don’t know, but I am amazed and disheartened that the largely male dominated Fed that wrote this regulation did so without any real knowledge or input of the people or the behavior they were regulating.
Assume this rule, unless stopped or modified in its interpretation, will become the law of the land.
I want you to imagine yourself near the register with your two brand new commodes to replace those old toilets that never quite flush. You know you are going to get a credit card because you are going to be buying, alas, several toilets and then other home repair materials from this place in the next month, and you want those discounts and coupons. You need them. Together, you and your life partner will repay all of your debt, and together, remodel your house.
Only remember to take your life partner with you.
~ Debra J. Levy
Debra J. Levy is a Past President of Mothers & More. She is currently working to bring Mothers & More’s Power of a Purse program to Dallas, Texas this spring, and locally, is a member and director of the National Council of Jewish Women, Greater Dallas Section. Debra sends readers to this comment by David’s Bridal, Inc. to view a public comment on this regulation made in reference to the beginning of married life, and not the “buying toilets” stage of married partnership.