WASHINGTON (1/5/11)--The Credit Union National Association (CUNA) in a recent comment letter said it is concerned by a Federal Reserve proposal that would require creditors to consider only an individual credit applicant’s ability to make payments, and not other household income, when determining an individual’s creditworthiness. CUNA noted that this proposed change could have a negative effect on individuals’ access to credit, with a particular impact on women who “are members of households and are either not working themselves or underemployed.” “These individuals should be allowed to rely on household income when applying for credit and nothing in the CARD Act or other provisions of the Truth-in-Lending Act require a different result,” CUNA added, referring to the Credit Card Accountability Responsibility and Disclosure (CARD) Act. CUNA also questioned the Fed’s decision to include application and processing fees under a proposed 25% cap. The proposed cap would require financial institutions to ensure that all account fees charged during the first year of an account do not exceed 25% of the account’s total credit limit. CUNA said that Congress did not intend for this cap to apply to account opening fees. However, CUNA agreed that the Fed’s restrictions on charging multiple fees for single transactions and proposed prohibition on account inactivity fees were consistent with the intent of the CARD Act. CUNA also supported proposed clarifications related to the definition of a credit card and requirements that aim to ensure that accountholders receive their statements in a timely manner. CUNA also backed proposed limitations that would hold penalty fees to $25 for initial violations and $35 for additional violations of the same type during the next six billing cycles. The CARD Act also prohibits card issuers from imposing more than one over-the-limit fee per billing cycle, imposing more than one penalty fee based on a single event or transaction, or imposing multiple returned payment fees by submitting the same check for payment multiple times, CUNA noted. For the full comment letter, use the resource link.