UNDERSTANDING CREDIT LAWS CONSUMER CREDIT LEGISLATION

TRUTH IN LENDING Truth in Lending Law Passes 1969 Requires creditors to tell consumers what credit will cost them BEFORE they use it Must include: Amount financed or borrowed Total number, amount, and due dates of payments Finance charge in dollar amounts and annual percentage rates

TRUTH IN LENDING Must include: All charges not included in the finance charge Penalties or charges for late payment, default or pre- payment Description of any security held by creditors Prohibits creditors from issuing credit cards you have not requested

EQUAL CREDIT OPPORTUNITY ACT Equal Credit Opportunity Act Passed 1975 Prohibits credit grantors from discriminating against consumers on the basis of Sex Marital status Race National origin Religion Age Receipt of public assistance When declined, a written explanation of why denied must be provided

FAIR CREDIT REPORTING ACT Fair Credit Reporting Act Passed in 1971, revised in 1977 Requires accuracy and privacy of information contained in credit reports If refused credit, law gives you the right to Receive name and address of reporting agency that sent report Find out from the reporting agency what factors are on file, the source of information and who received the information

FAIR CREDIT REPORTING ACT If refused credit, law gives you the right to Require a recheck of any information you find false Receive a corrected report if errors are found Require the agency to send the corrected report to all creditors who receive false information

FAIR CREDIT BILLING ACT Fair Credit Billing Act Passed 1975 Protects consumers against unfair billing practices Outlines procedures to follow in resolving billing errors or disputes Requires creditors to send customers a written explanation of steps to take when questions arise Customers have 60 days after receiving bill to notify creditor of error Fair Credit Billing Act Creditor must answer within 30 days Within 90 days, the creditor must either correct the bill or explain if it is accurate

ELECTRONIC FUND TRANSFER ACT Electronic Funds Transfer Act Prohibits the distribution of unrequested EFT cards Requires issuers of EFT cards to provide cardholders with written information outlining their rights and responsibilities for the card and its use Limiting to $50 the liability for unauthorized tranfser Requires issuers to provide customers with printed receipts

FAIR DEBT COLLECTION PRACTICES ACT Fair Debt Collection Practices Act Passed 1978 Protects consumers against unfair methods of collecting debts Debt collectors may not: Reveal or publicize a debtor’s debt Contact debtors at inconvenient times Before 8am or after 9pm Contact debtors at inconvenient places Such as work

FAIR DEBT COLLECTION PRACTICES ACT Debt collectors may not: Use the treats or abusive language Make annoying, repeated or anonymous phone calls Make false or misleading statements about the collector’s identity or the consequences of nonpayment Collect unauthorized fees or charge debtors for calls

NEW RULES FOR CREDIT CARDS Card issuers will not be able to raise interest rates unless you are more than 30 days late paying your bill—currently they can raise rates on existing balances at any time. Bills will have to show terms, fees and total interest clearly, not in hard-to-read fine print. Issuers will have to give 45 days’ notice of new terms and rates—up from the current 15 days. Interest will be calculated only on what you owe, not on a two-cycle basis combining balances fro the current month and previous month.