Consumer Protection Acts in Financial Regulations that You Should Know
The government enacts consumer protection laws in its financial regulations to keep the activities of financial institutions in check so that consumers are not exploited. Each consumer protection act in financial regulations is limited by the omissions. Here is a discussion on some of the essential consumer protection acts in financial regulations.
The consumers and their financial records are protected from abuse by the consumer credit protection act that was moved by the Congress in 1968. More laws have been laid down that stipulates the government’s procedure when it needs information from the bank about a customer, how the bank should handle the deposits of customers and how the bank should manage the borrowers. An increase in data theft by cybercriminals, the expansion of underground and legal market for data and growth of data analytics has led to more federal laws to be made to curb the extent of financial history data of another person that one should collect and ways they should use the data.
There are boundaries that the government should not go beyond when accessing your personal financial records because the right to financial privacy act protects you. The verdict in the Supreme Court of the United States v. Miller in 1978 declared that the records of the consumer of a bank are not subject to constitutional privacy protection; thus the Congress reacted to this ruling by passing the right to financial privacy act to protect the confidentiality of personal financial records.
Government officials cannot gain access to personal financial records if they lack a written consent, a search warrant or a subpoena as required by the financial privacy act. The local or state governments are not affected by this law for it governs the federal government and its agents, officers, agencies, and departments alone. The investigators must mail the account holder a notification and wait for response for 10-14 days after the mailing date before they are allowed to start a search that should also be authorized. The act protects partnerships of five or less than five members and individuals and excludes companies and large groups like labor unions and trade associations. The act applies to assortment of institutions like money-order issuers, depository institutions such as banks, the U.S. postal service, securities and futures brokerages, thrifts and credit unions, travelers’ check issuers, commodity trading advisors, casinos and card clubs.
Federal Reserve Board in 1985 adopted the credit practices rule to protect the consumers who were in debt. The act examines issues that are related to consumer credit contracts with lenders such as department stores, car dealers, and financing companies. The act is concerned with houseboats and mobile homes but not bank loans, agreements with loan associations, or real estate purchases.