The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The Consumer Credit Protection Act (CCPA) was created to protect consumers from creditors. Its goal is to provide maximum transparency to consumers and close the knowledge gap, making financial concepts easy to understand and accessible for everyone. Additionally, it aims to prevent lenders from discriminating against anyone applying for credit.
The federal legislation originally consisted of only the Truth in Lending Act, which established the National Commission on Consumer Finance. Since it was drafted in 1968, the act has been through multiple revisions and additions and now encompasses many aspects of consumer finance, including:
The foundation of the Consumer Credit Protection Act is rooted in four fundamental consumer rights:
If you’ve applied for a credit card, loan or mortgage, chances are you’ve interacted with some aspect of the CCPA. For example, when you apply for a mortgage, you’ll receive a loan estimate and a closing disclosure with relevant information about fees, interest and more. When you accept a new credit card, you sign an agreement that details your available credit balance, information on your interest rates and other fees and payment schedules. These are both examples of the CCPA at work.
Consumer rights are protected by these seven amendments.
The Equal Credit Opportunity Act (ECOA) aims to provide all Americans who apply for credit equal financial opportunity.
It prevents creditors from denying an application based on any non-creditworthiness factor, including:
The Department of Justice can hold an organization accountable if it has a history of discrimination. If you’re asked any of these personal questions when applying for a loan, know they’re not required for approval and you can choose not to answer.
Main protection: This act prohibits creditors from denying a loan application on the basis of race, color, sex or religion.
Title III was enacted to stop creditors from claiming a high percentage of employees’ wages to pay off their debts.
There are three key features included in Title III:
Title III applies to all employers and consumer creditors operating in the United States. This protects all employees in the country from garnishments exceeding the stipulated limits.
Main protection: Title III limits wage garnishment and protects employees from being fired on the basis of garnishment.
The Truth in Lending Act (TILA) requires creditors to provide consumers with all the necessary information for a personal loan, a mortgage or another line of credit. This includes all fees, interest rates and other relevant information, which must be presented in an easy-to-understand way.
TILA helps consumers by:
By providing consumers with comprehensive information about credit products, TILA empowers them to make informed financial decisions and promotes fair lending practices in the marketplace.
Main protection: The act requires creditors to explain the true cost of credit in a way that’s easy to understand.
The Fair Credit Billing Act (FCBA) was designed to give consumers the right to dispute billing errors, including unauthorized charges, unidentified charges, mathematical errors, failure to provide an account statement or failure to credit an account with a payment. Under the act, consumers can file a claim within 60 days of the error and aren’t required to pay the amount until the issue is resolved.
This act also ensures creditors handle overpayments to an account by refunding or crediting them to the consumer’s account.
Main protection: It gives consumers the right to dispute errors and unauthorized credit use.
The Fair Credit Reporting Act (FCRA) ensures consumers have the right to the information listed on their credit report. Before this act was enacted in 1970, consumers couldn’t order a copy of their credit report, check the accuracy of the items on it or dispute these items. This meant credit bureaus could get away with inaccurate reporting without repercussions.
Some important things in the FCRA include:
The law also restricts the length of time for reporting negative information, helping consumers rebuild their credit histories over time.
Main protection: The act requires creditors to tell consumers when their information is being used and gives consumers the right to protect their information.
The Fair Debt Collection Practices Act (FDCPA) gives consumers who’ve defaulted on a loan certain rights and protections. Debt collection agencies have a history of aggressive and unfair tactics to coerce consumers into paying back their debts. The government stepped in with federal regulations to help monitor this industry.
The FDCPA protects consumers by:
The FDCPA is enforced by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). Consumers may also file a private lawsuit against a debt collector for violations of the FDCPA.
Main protection: It protects consumers from harassment by debt collection agencies.
With the rise of ATMs and the fall of paper checks, the government enacted the Electronic Fund Transfer Act (EFTA) to give consumers the same level of confidence in making electronic payments as they have with paper payments.
Here are some of the payment methods the EFTA covers:
Under the Electronic Fund Transfer Act, consumers have protections against liability for unauthorized transactions through prompt notification to the financial institution. This act also mandates that financial institutions investigate and correct errors promptly, ensuring accurate electronic fund transfers.
Main protection: The act ensures protection for electronic transfers and limits financial penalties for errors.
As you navigate life’s financial opportunities and challenges, you’ll work with various creditors and financial advisors. All these companies and individuals have regulations they need to adhere to, but sometimes the consumer needs to keep them in line.
That’s why consumers need to be well informed about their rights. Staying knowledgeable lets you recognize when your rights are violated and exercise your right to be heard should you need to file an official complaint. If you believe you’ve been discriminated against or misled, you can file a complaint with any of the following organizations:
File a complaint with the Federal Trade Commission here:
https://www.ftccomplaintassistant.gov/
File a complaint with the Better Business Bureau here:
https://www.bbb.org/consumer-complaints/file-a-complaint/get-started
File a complaint with the U.S. Attorney General here:
https://www.justice.gov/crt/filing-complaint
File a complaint with the Consumer Financial Protection Bureau here:
https://www.consumerfinance.gov/complaint/
Before working with a credit repair company, make sure it understands and values your rights. Lexington Law Firm helps you leverage your rights by complying with the Credit Repair Organizations Act—and we’ve helped clients legally address millions of questionable items on their credit reports. To learn more about your rights as a consumer and how to better understand your credit, get a free credit assessment from Lexington Law Firm today.
Note: The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
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