The Consumer Credit Protection Act (CCPA) was created in 1968 to help guarantee American consumers fair and honest credit practices. This federal legislation standardized practices to ensure that lenders throughout the country followed the same sets of regulations.
As banking and credit reporting evolved, additional laws were developed and put into place under the Consumer Credit Protection Act. Although each has a special niche among the financial guidelines, they share a common trait. They were put in place to protect consumers.
Now the CCPA is an overarching law that contains several acts with more precise scopes. Among these specific laws are the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Fair Debt Collection Practices Act and the Electronic Fund Transfer Act.
Truth in Lending Act
Enacted in 1969, the Truth in Lending Act (TILA) guarantees you complete and honest disclosure from a creditor. It applies to many types of credit, from open-end credit such as a credit card to closed-end credit such as a mortgage or a car loan. The TILA requires lenders to be completely forthright in explaining how much the credit will cost you and offer materials explaining the parameter of the loan.
The TILA has four amendments to add further consumer rights:
- The Fair Credit Billing Act (FCBA) provides a way to settle billing-related disputes.
- The Fair Credit and Charge Card Disclosure Act (FCCCDA) requires credit and charge card issuers to disclose key information when issuing new cards.
- The Home Equity Loan Consumer Protection Act (HELCPA) requires home equity loan lenders to disclose information upon granting new loans.
- The Home Ownership and Equity Protection Act bans predatory lending practices which take advantage of less qualified borrowers.
Fair Credit Reporting Act
Enacted in 1970, the Fair Credit Reporting Act (FCRA) was the first federal law to regulate how your personal information could be used by a private business. This act safeguards your credit by requiring consumer reporting agencies to follow certain standards. It gives you the right to a free credit report annually, protected access and accurate reporting. This act gives you the right to have inaccuracies fixed in a timely manner as well as the right to sue and seek damages for violations.
The Fair Credit Reporting Act contains three smaller acts: the Credit CARD Act, the Dodd-Frank Act, and the Fair and Accurate Credit Transactions Act. These deal with the accountability of credit card companies and your rights if someone steals your identity.
Equal Credit Opportunity Act
Enacted in 1976, the Equal Credit Opportunity Act (ECOA) prohibits creditors from discrimination based on religion, sex, race, color, marital status, national origin, age or because you receive public assistance when determining credit worthiness. Enforced by the Federal Trade Commission, this act protects you from unfairness when applying for credit.
Fair Debt Collection Practices Act
Enacted in 1977, the Fair Debt Collection Practices Act (FDCPA) concerns the way you are treated and contacted by debt collectors. It provides collectors with a list of rules they must follow to protect you from harassment, false statement and unfair practices. For example, debt collectors can only contact you between 8:00 a.m. and 9:00p.m. They must identify themselves as collectors and explain why they have called. They are also not allowed to contact you at work if your employer does not approve or if you request they stop contact in writing.
Electronic Fund Transfer Act
Enacted in 1978, the Electronic Fund Transfer Act (EFTA) protects you when you transfer funds electronically, whether you are using an automated teller machine (ATM), swiping your debit card at a point-of-sale (POS) terminal or paying a bill over the telephone. This act is limited to transactions that immediately withdraw the funds from your account.
The act protects you from fraud and limits your liability if your card is lost or stolen. It requires companies to disclose information regarding fees and liability regulations when they issue you cards. It also protects your right to choose a form of payment other than an electronic fund transfer.