Government regulation of credit

1. Chapter 4, Section 4 Government regulation of credit

2. Usury law – law restricting the amount of interest that can be charged for credit. • Many states have a maximum interest rate of 18% a year, or 1.5% per month. State usury law

3. 1968 - Ensures that consumers are fully informed about the costs and conditions of borrowing. Truth in lending act

4. 1970 – Protects the privacy and accuracy of information on a credit check. 3 major credit bureaus: 1) Equifax 2) Experian 3) Trans Union Fair credit reporting act

5. 1974 – prohibits discrimination based on sex, race, religion, marital status, age, or receipt of public assistance. Equal credit opportunity act

6. 1974 – Set up a procedure for correcting mistakes on a credit report Fair credit billing act

7. 1977 – prevents abuse by professional collectors; does not include banks or businesses that collect their own accounts. Fair debt collection practices act

8. Bankruptcy – the inability to pay debts based on the income received. • If you declare bankruptcy, it will remain on your credit report for 10 years. • This makes it very difficult to reestablish your credit rating, leaving it hard to get a loan. Bankruptcy