Consumer Protection Laws/Agencies

Fair Credit Reporting Act

  • Protects consumer’s information collected by the major credit bureaus (Equifax, TransUnion, Experian)

  • Credit reporting agencies must correct or remove any inaccurate or unverified information within 30 days of being notified

  • Negative items cannot be reported beyond seven years and bankruptcies cannot be reported beyond 10 years

  • 1 free credit report per year (x3)

Fair Debt Collection Practices Act

  • Prevents third-party debt collectors from using deceptive or abusive methods to collect debt

  • 8am-9pm

  • If they get an attorney - communication can only occur through the attorney

Truth in Lending Act

  • Protects consumers so that they fully understand the terms of a loan

  • Lenders must state interest rate using APR

  • AKA creditors must tell the truth and not hide things

Fair Credit Billing Act

  • Amended the Truth in Lending Act

  • Requires timely, written verification to a consumer disrupting a billing error

    • Lender has 30 days to respond after notified

  • Steps for disputing a billing error

    • Notify the creditor, in writing, within 60 days of receiving the bill, about the disputed item

    • The creditor must not notify the consumer of receiving the dispute, in writing, within 30 days of receiving the notification

    • The creditor has 90 days to resolve the billing dispute, after receiving notification from the consumer

Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)

  • 2005

  • Requires certain creditors to disclose on the front billing statements a minimum monthly payment warning for consumers and a toll-free telephone number, establish and maintained by the commission, for consumer seeking information on the time required to replace specific credit balances

Credit Card Accountability, Responsibility and Disclosure (CARD) Act

  • 2009

  • Prevents credit card, companies, and banks, from charging hidden fees and extra extraordinary interest rates, as well as promoting easy to understand statements

  • Address these issues

    • Prevent certain rate increase practices

    • Prevents hidden fees and confusing payments due dates

    • Easy to understand disclosures

    • Protection of young adults

    • Requires that payment in excess of the minimum payment amount be applied in favor of the card holder

Federal Deposit Insurance Corporation

  • Formed in 1933

  • Goals

    • Insure deposits

    • Manage receiverships

    • Supervise financial institutions for financial stability and consumer protection

  • 250,000

  • Funded entirely through premiums charged to banks, to ensure their deposits, known as deposit insurance

Securities investor protection corporation (SIPC)

  • Formed in 1970

  • Statutorily created nonprofit membership, corporation funded by its member securities, broker, dealers, with the goal of returning cash and securities to investors, in the event a brokerage firm becomes in solvent

  • Covers cash, stocks, bonds, and investment company shares (mutual funds)

  • Up to 500,000

Worker Protection

  • Employee retirement, income securities act (ERISA)

  • 1974

  • Designed to protect employees, retirement, savings accounts from creditors and from plant sponsors

Financial industry regulatory authority (FINRA)

  • Self regulatory organization for all security firms doing business in the US

  • Created in 2007 by emerging the national Association of security dealers and the enforcement functions of the New York Stock Exchange

  • Series 3

    • Permits an individual to sell futures contracts

  • Series 6

    • Permits an individual to sell investment company products, such as mutual fund, or unit investment, trust and variable life, and variable annuities

  • Series 7

    • General securities registered representative

    • Permits and individual to sell, stocks, bonds, government, municipal bonds, options, REITS, and investment company products

  • Series 24

    • General securities principal

    • Qualifies individuals required to register a general securities principles in order to manage supervise the members investment banking or securities business for corporate securities, direct participation programs, and investment company product products

  • Series 26

    • Investment company products/ variable contracts limited principle

  • Series 63

    • Blue sky laws

    • Prohibit fraud by requiring securities and advisor to register with the state

  • Series 65

    • Uniform investment advisor law exam

  • Series 66

    • Uniform combined state law exam