Consumer credit transactions are regulated both at the Federal and the State level. While there is considerable variation among State laws governing consumer credit transactions, most are based on Federal laws and various versions of State laws covering several standard areas.

The Federal Trade Commission (FTC) enforces the credit laws that protect your right to get, use and maintain credit. These laws do not guarantee that everyone will receive credit. Instead, the credit laws protect your rights by requiring businesses to give all consumers a fair and equal opportunity to get credit and to resolve disputes over credit report errors.

The Truth in Lending Act — The customer had to be told the true cost of borrowing, so they could figure out exactly what the charges would be. You must be informed, in writing of the finance charge and the APR before you sign any contract. Also, you need to be informed of the method they are going to use to calculate the balance on which you pay a finance charge.

This Act gives you a chance to change your mind when you use your home as security in a transaction. The first 3 day right of rescission gives you 3 business days to cancel the transaction and the creditor must give you this notice prior to the transaction.

The Fair Credit Reporting Act — Basically this act regulates the activities of credit reporting agencies or credit bureaus and gives the FTC responsibility for enforcement.

The Fair Credit Billing Act — This law establishes procedures requiring creditors to promptly correct billing errors, and allows the consumer to withhold payment on damage goods, and makes creditors promptly credit your payments.

The Fair Debt Collection Practices Act — This act establishes the guidelines for collectors to follow. They may not contact you at unreasonable times or places. Unless agree, they must not contact you before 8 am or after 9 pm, nor at your place of employment. You must receive a written explanation of your supposed debt and what to do if you feel you do not owe the money.

The Equal Credit Opportunity Act — This Law prohibits discrimination in the granting of credit of any form due to sex, marital status, race, religion or age.

The Electronic Funds Transfer Act — This act gives protection in all stages of modern banking techniques such ATM, telephone transfers, computer transactions, etc. Its limits for the first time consumers’ liability for lost or unauthorized use of debit or electronic cards are similar to those in place for credit cards.

Notifying the bank within 2 days, your maximum liability is $50 — if you miss that time-frame, you could be liable up to $500 in charges. After 60 days, you’ll be liable for the entire amount.

The Credit Repair Organization Act — This law states that the credit repair organizations could not make a statement that was misleading. They were prohibited from advising their clients to make a misleading or untrue statement to a credit bureau.

This law gives the consumer 3 day right of cancellation, which needs to be on the contract and must direct you on how to cancel. The document must detail the services that will be provided, guarantees, time frame for service and cost for the consumer.

You can find more information on consumer financial regulations in the Federal Reserve’s Consumer Help list of Consumer Protection Laws or its comprehensive list of regulations.

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Tags: Consumer Credit Laws, Consumer Protection Laws, Credit Repair, Credit Report Errors, The Credit Repair Organization Act, The Electronic Funds Transfer Act, The Equal Credit Opportunity Act, The Fair Credit Billing Act, The Fair Credit Reporting Act, The Fair Debt Collection Practices Act, The Truth in Lending Act

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