Credit Laws arise under both state and federal regulations governing interest, finance charges, cash advances, charges for extensions of credit in excess of pre-established limits, late fees or delinquency charges, premiums on credit life and credit accident and health insurance, annual fees and other charges and fees, and many others. If a business grants credit to customers, it must comply with federal laws affecting credit sales to consumers, as well as state laws in whichever jurisdiction it is operating. Federal credit laws include the Truth in Lending Act (TILA), the Fair Credit Billing Act (FCBA), the Equal Credit Opportunity Act, the Fair Credit Reporting Act (FCRA), and the Fair Debt Collection Practices Act (FDCPA).
The Truth in Lending Act
This Act helps customers know what they are agreeing to in a credit transaction. It requires businesses to disclose their exact credit terms and regulates how credit providers can advertise. Required disclosures include monthly finance charges, annual interest rates, payment due dates, total sale prices, and how late charges are assessed and how much they are.
The Fair Credit Billing Act
This federal law governs billing errors on credit accounts. The customer must notify the credit provider within 60 days of an incorrect charge, and the credit company must respond within 30 days. The creditor must conduct a reasonable investigation and, within 90 days of getting the customer's letter, explain why the bill is accurate or correct the error. Failure of a creditor to comply will result in a $50 credit toward the disputed amount, even if the bill was correct, and the creditor cannot report the disputed amount to credit agencies until the disagreement is resolved.
The Equal Credit Opportunity Act
Credit companies may not discriminate against an applicant on the basis of race, color, religion, national origin, age, sex, or marital status. The only justifiable bases for declining to extend credit are things like the applicant's financial status (earnings and savings) and credit record. Although there is a prohibition against age discrimination, a credit company can reject a consumer who is underage.
The Fair Credit Reporting Act
This is the federal law primarily related to credit reporting agencies. It protects consumers from haiving their eligibility for credit disrupted as a result of incomplete or misleading information contained in one's credit report. The law gives consumers the right to receive a copy of their credit reports and challenge inaccurate information contained in it. If the business reporting inaccurate information does not change or delete the inaccurate information after being alerted to the inaccuracy, the consumer can add a 100-word statement to the file explaining his or her side of the story.
The Fair Debt Collection Practices Act
This federal law addresses abusive methods used by third-party debt collectors. This act can create liability for harassing or abusive practices, like speaking to people other than the debtor about the obligation, repeatedly calling, trying to collect amounts not due, intentionally reporting inaccurate amounts to credit reporting agencies, and so forth.
Know Your Rights!
Articles About Credit Law
- Creditor Froze My Bank Account without Notice - Now What?When a creditor has initiated a claim against a person that owes money to the financial institution, it is possible to take certain actions that may negatively impact the borrower. However, only so much may be accomplished without a judgment or settlement pursued through the courtroom and with a judge before these processes complete.
- Dealing with the Stigma of BankruptcyMost businesses and individuals don’t go into bankruptcy unless they have absolutely no other choice. Bankruptcy, after all, is a last resort. But it’s also not all negative. Bankruptcy, even with its drawbacks, is a chance for a new start. It’s a way to restructure, learn from mistakes and return with more experience.
- I’m Getting Divorced, What Do I Do with the Credit Cards?A common question that is received is what happens to credit card debt when you get a divorce.
- Are Wages to Independent Contractors Subject to Garnishment?Persons that work for themselves are considered independent contractors even if they are employed within the building of a company. These individuals are not considered employees and may not be subject to various regulations or stipulations, and this means that numerous aspects do not apply to these persons as they would a standard employee.
- How to Get a Judgment Award from a Business in Bankruptcy ProceedingsWhen someone has been injured while working at a company, it is important that he or she is able to recover from these incidents. However, if the business is going through bankruptcy, this may cause complications or lead to an impossible situation where the judgment award may not be collected.?
- Consumer Financial Protection Bureau (“CFPB”) Continues to Focus on Informed DecisionsThis month the Consumer Financial Protection Bureau (“CFPB”) prevailed on a motion to dismiss brought by Navient, which was founded, at least partially, on constitutional challenges. The case is Consumer Fin. Prot. Bureau v. Navient Corp. (M.D.Pa. Aug. 4, 2017, No. 3:17-CV-101) 2017 U.S.Dist.LEXIS 123825.
- Debt Collection Procedures in ChinaCollecting debts accrued in or through China has various complications such as language and cultural barriers in place that cause problems for many businesses. Foreign laws, customs and processes lead to challenges many companies did not consider, which means a debt collection service may need to be hired for assistance.
- Student Loan Dischargability: A Debtor Attorney’s PerspectiveStudent loan debt in the United States is the largest class of consumer debt today behind mortgages, and is higher than both credit card debt and automobile loans.
- When You May Need to Contact a Lawyer to Protect Your Creditor RightsCreditors lend funds to various persons and businesses through contractual agreements with payment terms and other conditions outlined specifically. However, when these deals are broken, it is important to contact a lawyer so that the rights of the creditor may be protected against bankruptcy, when the debtor cannot pay and the death of the individual who borrowed the monies.
- Employee Rights When Employer Is Facing BankruptcyNew employees facing a company going bankrupt need to understand what rights, if any, they have once the business fails. This means research, contacting corresponding officials and asking for advice and information online or through other services.
- All Debtor and Creditor Law Articles
Articles written by attorneys and experts worldwide discussing legal aspects related to Debtor and Creditor including: bankruptcy, collections, credit and mortgage, debt recovery and insolvency.
Credit Law - US
- Community Reinvestment Act
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulation BB (12 CFR 228). The regulation was substantially revised in May 1995, and was most recently amended in August 2005.
- Consumer Credit Law - Overview
Credit allows consumers to finance transactions without having to pay the full cost of the merchandise at the time of the transaction. A common form of consumer credit is a credit card account issued by a financial institution. Merchants may also provide financing for products which they sell. Banks may directly finance purchases through loans and mortgages.
- Consumer Credit Protection Act
Congress passed the Consumer Credit Protection Act in part to regulate the consumer credit industry. It requires creditors to disclose credit terms to consumers. The Consumer Credit Protection Act also protects consumers from loan sharks, restricts the garnishing of wages, and established the National Commission on Consumer Finance to investigate the consumer finance industry. Credit card companies and credit reporting agencies are also regulated by the Act. The Act also prohibits discrimination based on sex or marital status in the extending of credit. The Act also regulates certain debt collectors.
- Credit Repair Organizations Act
(a) Findings.--The Congress makes the following findings: (1) Consumers have a vital interest in establishing and maintaining their credit worthiness and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assistance from credit repair organizations which offer to improve the credit standing of such consumers. (2) Certain advertising and business practices of some companies engaged in the business of credit repair services have worked a financial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters. (b) Purposes.--The purposes of this title are-- (1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations.
- Credit Reports and Scores - Federal Deposit Insurance Corporation (FDIC)
The FDIC has created this webpage to inform consumers about the new Fair and Accurate Credit Transactions Act's (FACTA) consumer provisions -- which gives new rights to free credit reports. FACTA also provides new rights to obtain your credit score. FACTA became law in December 2003.
- Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is an American federal law (codified at 15 U.S.C. § 1681 et seq.) that regulates the collection, dissemination, and use of consumer information, including consumer credit information. (Full Statute (PDF).) Along with the Fair Debt Collection Practices Act (FDCPA), it forms the base of consumer credit rights in the United States. It was originally passed in 1970, and is enforced by the US Federal Trade Commission.
- Federal Trade Commission (FTC) - Credit and Loans
Almost every day, you're involved in some type of financial transaction requiring an educated decision. This site has information for you, whether you’re shopping for a mortgage or auto loan, checking the accuracy of your credit report, dealing with debt collectors, or looking for ways to protect your personal financial information.
- Financial Management Service (FMS)
The Financial Management Service a bureau of the United States Department of the Treasury, provides central payment services to Federal Program Agencies, operates the federal government's collections and deposit systems, provides government-wide accounting and reporting services, and manages the collection of delinquent debt owed to the government. FMS also supports federal agencies' financial management improvement efforts in the areas of education, consulting, and accounting operations.
- Truth in Lending Act
The Truth in Lending Act requires "meaningful disclosure of credit terms" and reflects a shift in emphasis from "let the buyer beware" to "let the seller disclose." It is designed to protect consumers against inaccurate and unfair credit billing and credit card practices too!
Credit Law - Europe
- Consumer Credit - EU Legislation
European legislation harmonizes the general conditions relating to consumer credit, including the main information consumers ought to be aware of, and their obligations. This information includes the annual percentage rate of charge or, failing that, the total amount that the consumer must pay for credit.
- Consumer Credit Act - United Kingdom
The Consumer Credit Act 2006 (which was fully implemented on 1 October 2008) updates and amends CCA 1974. It establishes a fairer, more transparent and competitive credit market, updating consumer credit legislation that had been in place since the 1970s, making it more relevant to today’s consumers.
Credit Law - International
- World Council of Credit Unions (WOCCU)
The World Council of Credit Unions (WOCCU) is the global trade association and development agency for credit unions. WOCCU promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. WOCCU advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
Organizations Related to Credit Law
Founded by consumer advocates and credit experts, Credit.com helps people make smarter financial decisions by providing free interactive tools, education, and unbiased comparisons of quality financial products and services. Credit affects many fundamental aspects of our lives. However, an estimated 125 million Americans cant accurately estimate their credit scores within 50 points, though that's often the difference between getting approved or denied for a loan or apartment. Credit.com's mission is to change that by providing consumers with valuable tools and information that allow them to effectively manage their credit portfolio with as much attention and care as their investment portfolio.
- National Association of Credit Management (NACM)
NACM® was founded in 1896 to promote good laws for sound credit, protect businesses against fraudulent debtors, improve the interchange of credit information, develop better credit practices and methods, and establish a code of ethics.
- National Credit Union Administration (NCUA)
The National Credit Union Administration (NCUA) is the independent federal agency that charters and supervises federal credit unions throughout the United States and its territories. NCUA administers the National Credit Union Share Insurance Fund (NCUSIF). Backed by the full faith and credit of the United States government, the NCUSIF insures the member accounts in all federal credit unions and the substantial majority of state-chartered credit unions.
- National Foundation for Credit Counseling (NFCC)
The NFCC promotes the national agenda for financially responsible behavior and builds capacity for its members to deliver the highest quality financial education and counseling services.
- US Government - MyMoney
MyMoney.gov is the U.S. government's website dedicated to teaching all Americans the basics about financial education. Whether you are planning to buy a home, balancing your checkbook, or investing in your 401k, the resources on MyMoney.gov can help you do it better. Throughout the site, you will find important information from 20 federal agencies government wide.
Publications Related to Credit Law
- Consumer Handbook of the Credit Protection Law
The Consumer Credit Protection Act of 1968--which launched Truth in Lending disclosures--was landmark legislation. For the first time, creditors had to state the cost of borrowing in a common language so that you--the consumer--could figure out what the charges are, compare costs, and shop for the best credit deal. Since 1968, credit protections have multiplied rapidly. The concepts of "fair" and "equal" credit have been written into laws that bar unfair discrimination in credit transactions, require that consumers be told the reason when credit is denied, let borrowers find out about their credit records, and set up a way for consumers to settle billing disputes.
- Credit and Divorce by the FTC
If you've recently been through a divorce - or are contemplating one - you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits - and pitfalls - of each.
- Credit and Your Consumer Rights - FTC
A good credit rating is very important. Businesses inspect your credit history when they evaluate your applications for credit, insurance, employment, and even leases. They can use it when they choose to give or deny you credit or insurance, provided you receive fair and equal treatment. Sometimes, things happen that can cause credit problems: a temporary loss of income, an illness, even a computer error. Solving credit problems may take time and patience, but it doesn’t have to be an ordeal.
- Equal Credit Opportunity - Understanding Your Rights Under the Law
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance. Creditors may ask you for most of this information in certain situations, but they may not use it when deciding whether to give you credit or when setting the terms of your credit. Not everyone who applies for credit gets it or gets the same terms: Factors like income, expenses, debts, and credit history are among the considerations lenders use to determine your creditworthiness.
- Your Credit Rights How the Law Protects You
Credit is valuable. The importance of how much credit you have and how you use it goes far beyond shopping. Whether you have good or poor credit can affect where you live and even where you work, because your credit record may be considered by prospective employers. That is why you need to understand how credit is awarded or denied and what you can do if you are treated unfairly. The major laws that regulate credit are outlined in this brochure.