I received exactly the same letter (in email form) from Discover Card about 9 months ago, so I immediately called them, thinking that someone was doing some very convincing phishing -- the email had zero suspicious headers, the mail relays looked right, the stylesheets looked exactly like Discover Card's, etc.
Once I got a knowledgeable rep on the phone, she said Discover Card did indeed send the email. She explained that the sentence means "federal regulations allow us to grant you a credit increase (without performing a credit check) based solely on your statement of your income", and therefore they're happy to store your stated income within your account profile in case they ever want to adjust your credit line in the future.
Now, this of course seems ridiculous to me, because creditors have always had complete freedom to adjust your credit line up or down as much or as little as they want without doing credit pulls. (I know this from first-hand experience when Citibank cut my credit line by 85% without doing a credit pull.)
I think what must have happened is that some federal law was passed (or maybe expired) last year such that now card issuers are allowed to ask/store/use their customers' income information, so they figure "hey, let's try to get as many customers as possible to volunteer this information, first by sending a letter that kinda makes it sound like they have to tell us, and then by telling them it can possibly benefit them in the future".
Three months after I posted this answer (i.e. during the holiday shopping season), there was an interesting new development in my case that I think might be relevant. Out of the blue Discover sent me a letter saying I might qualify for a credit line increase. All I had to do was go to a page on the Discover site and answer two questions: 1) my yearly income, 2) my monthly housing expense.
So I went to the page and filled in the same number for (1) that I gave to the phone rep many months earlier -- a number, it should be said, that Discover has no way of verifying. When I was done, the site instantly reported that I was eligible for up to a 20% credit line increase. I was taken to a page with a slider bar where I could select the exact amount of the increase that I wanted. I picked the maximum (I'm not sure why anyone wouldn't), and it was instantly approved. There was no accompanying change in terms, APR, anything.
(a) I have only a "good" credit score (not nearly an "excellent" score), so I have not been offered a credit line increase by anyone in quite a long time. (On the other hand, I have been a Discover cardmember for ~20 years and have never missed a payment or carried a balance with them. Additionally, I rarely "double" my cashback with them; I usually just take the credit against my balance.)
(b) I have had my credit reports "frozen" for almost four years to help prevent identity theft, so Discover could not have pulled my credit before making this offer. (Naturally they have their own internal data on me and can generate their own internal quasi-FICO scores.)
So ... the moral of the story would appear to be that by my responding to their initial inquiry a year ago and giving a number (which, again, they had no way of verifying) for my annual income, I was eventually given a substantial credit line increase (around the time of year when Discover probably thought I would make use of it) despite my merely average credit score.