Essential Consumer Protection Acts in Financial Regulations
The consumer protection laws in the financial regulations of the government controls and monitors the activities of financial institutions to prevent consumer exploitation. The consumer protection acts in financial regulations are limited by the exceptions. Here are some of the consumer protection acts in financial regulations that you should know.
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. 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.
The financial privacy act was passed in 1978 by Congress to restrict the extent to which the government can access your personal financial records. The 1978 decision in the Supreme Court of the United States v. Miller pronounced that the records of the consumer of a bank are not subject to constitutional privacy protection hence the Congress took it upon itself to protect the confidentiality of personal financial records of the consumer by legislating the right to financial privacy act.
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 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 account holder should be mailed a notification by the investigators, and they should wait for a response for 10-14 days after that date of mailing before they start an authorized search. This law takes care of partnerships of five or less than five members and individuals but not 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.
Consumers in debt are protected by the credit practices rule that was embraced by Federal Reserve Board in 1985. The act deals with consumer credit contracts with creditors 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.