Consumer Protection Acts in Financial Regulations that You Should Know
The consumer protection laws in the financial regulations of the government controls and monitors the activities of financial institutions to prevent consumer exploitation. There are exceptions to every consumer protection act in financial regulations. Here are some of the consumer protection acts in financial regulations that you should know.
In 1968, the Congress enacted a consumer credit protection act to protect the consumers and their financial records from abuse. More laws have been set later on that clarify how the government should get information from the bank about a customer, how the bank should manage deposits of its customers and the relationship that the bank should have with borrowers. There is a rapid increase in theft by cybercriminals, underground and legitimate market for data and data analytics thus the government has to establish more laws that regulate the extent to which one can collect data on the financial history of the other person and what they are allowed to do with 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.
The financial privacy act requires that government officials should get a search warrant, consent in written or a subpoena for them to access personal financial records. The applies to the federal government and its agents, officers, agencies and departments alone but not the local or state governments. Before an authorized search begins, the account holder should be notified by the investigators and they should wait for the response for 10-14 days from the date they mailed a notice to the account holder. 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. This law governs a group 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.
Consumers in debt are protected by the credit practices rule that was embraced by Federal Reserve Board in 1985. The law focuses on consumer credit contracts with creditors such as department stores, car dealers, and financing institutions. It does not take into consideration the bank loans, contracts with loan associations, or real estate purchases but it covers houseboats and mobile homes.