Credit bureaus would be probihited from automatically putting the past credit history of one spouse into the credit report of the other under proposed guidelines outlined yesterday by the Federal Trade Commission.
Under the proposed "interpretations" of the Fair Credit Reporting Act, issued by the agency to solicit public comment, credit bureaus would be required to establish separate credit histories for women based upon relevant information previously filed only in their husband's name.
The interpretations are designed to clarify the relationship of the Fair Credit Reporting Act, which is designed to protect consumers against the circulation of inaccurate against the circulation of inaccurate or obsolete information, to the Equal Credit Opportunity Act, which prohibits creditors from discriminating on the basis of sex or marital status in any aspect of credit transaction.
The agency noted that creditors, credit bureaus, and consumers have expressed concern that the older Fair Credit Reporting Act can be interpreted to substantially limit a creditor's access to credit history information needed to evaluate married or formerly married women applying for separate accounts during the initial stages of implementation of the Equal Credit Opportunity Act. "At the same time, these groups share a common interest in (1) assuring that creditworthy women can obtain credit and (2) maintaining the integrity of the credit information system," the commission said. "The proposed interpretations are designed to minimize the impact of the FCRA on the goals of the ECOA."
Under the ECOA, all accounts opened after June 1, 1977, which both spouses may use or for which both are liable, must be reported by creditors in both names. In addition, on that date, a consumer can require that the creditor report the credit history on any account already shared with a spouse to credit bureaus in both names.
"The lack of accessibly credit history of women has severely restricted their ability to obtain credit," the commission noted in an explanatory statement, adding that over discrimination against women was a primary cause.
Before the ECOA, some creditors would issue a credit card to a married woman - individually creditworthy - only in the name of her husband. Also, when a single woman married, her credit cards would often be withdrawn and reissued in the name of her husband even though her individual creditworthiness was not affected by the marriage.
Where a married woman was jointly liable with her husband for a credit obligation, the agency noted, the history of the account was almost always reported only in the name of her husband, so that many women have no credit identity separate from that of their husbands, even though they have used and been liable for joint credit accounts.
When a divorce or separation accured, the credit history from the marriage continued to be attributed to the husband, and not to the wife, so that she found it necessary to re-establish her credit history.