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Why No Credit for Stay-at-Home Moms?

10:26 AM, Jan 3, 2011 • By JEFFREY H. ANDERSON
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As we ring in the New Year, the Wall Street Journal reports, "The Credit Card Act signed into law last year [in 2009] was supposed to stop financial institutions from sleazy antics. But, instead, some retailers say, it may restrict stay-at-home moms."

The Journal writes that the Federal Reserve has been "implementing" and "clarifying" aspects of the Credit Card Act, which President Obama signed into law, and that the Fed has now proposed a rule, which – in the Journal's words – "would require credit card-issuers to consider only a borrower's 'independent' income rather than household income" in determining whether to issue a store credit card. This could "make it difficult for some consumers to get credit on the spot, especially stay-at-home moms." 

The Journal elaborates:

Under the proposed rule, if a customer with no income requested credit on the spot, he or she wouldn't qualify for it unless a higher-earning spouse applied jointly. 

“The proposed clarification would have a chilling effect on the willingness of customers to apply for store credit because of the embarrassment of being denied credit at the point-of-sale, and the possibility of being told by a store clerk in front of other customers that she must have her husband co-sign for the account,” wrote John Buell, chief financial officer of Limited Stores LLC, in a letter to the Fed this month.

This comes on the heels of another proposal by the Fed (subsequently tweaked), under which "retailers would have had to require customers to provide pay stubs and tax documents when applying for a credit card at the cash register." Moreover, it's par for the course. The Obama administration’s and Democratic congressional leaders' preferred mode of legislating is to vest incredible amounts of quasi-legislative power in the hands of unelected officials (see Obamacare), who then proceed to issue legally binding "rules" that declare what Americans can or cannot do, nationwide. 

A few weeks ago, Health and Human Services Secretary Kathleen Sebelius issued a 347-page, 118,072-word "rule" to implement a very small portion of Obamacare. The Constitution, including all 27 amendments, is only 7 percent as long as that "rule." Then, a few days before Christmas, Sebelius issued a 136-page "rule" that will now give her, and her subordinates, largely unchecked power to pass judgment on the prices of health insurance throughout the United States. 

The political philosopher John Locke, whose ideas (perhaps more than those of any other man) inform our founding documents, said that legislators cannot delegate their legislative power – at least not legitimately. The Constitution's opening words (beyond the Preamble) declare, "All [not some] legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives." The only exception is the president's power to sign or veto legislation, a power likewise granted in Article I. 

The Constitution doesn't say anything about authorizing Congress or the president to delegate massive amounts of de facto lawmaking power to others, like the unelected secretary of Health and Human Services, the unelected administrator of the Centers for Medicare and Medicaid Services, or the unelected members of Obamacare's Independent Payment Advisory Board.  The Constitution empowers members of the executive branch to execute the laws, not to make them. 

In the New Year, it's well worth revisiting the works of such men as Locke, the Founders, and Tocqueville (who, in Democracy in America – especially in the closing chapters warned profusely against centralized power).  Such works are, of course, available for purchase in bookstores nationwide, although stay-at-home moms might want to remember to bring cash.

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