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Building “Ability to Pay”-Compliant Growth Strategies

Insights - The CARD Act’s income provision poses a lasting challenge for issuers to comply without sacrificing profit goals

White Paper

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) introduced sweeping changes to how US credit card issuers conduct business and price their financial services.

Of these, one of the most difficult components to comply with has been the ability to pay (ATP) provision. The Federal Reserve’s Final Rule implementing this provision requires that, prior to the extension of new credit, issuers consider an applicant’s income and/or assets in relation to the applicant’s debts.