Consumer Protection Regulations

In addition to the Community Reinvestment Act, the Federal Reserve has responsibilities for other regulations in the consumer credit area. These responsibilities began in 1968 with passage of the Consumer Credit Protection Act, which required creditors to state the costs of borrowing using uniform terminology so that consumers could compare credit costs. Since 1968, protections have been expanded to cover virtually every stage of the consumer credit transaction-protections outlawing discrimination in credit granting, allowing consumers access to their credit records, and preventing harassment in debt collections.

• Regulation B, Equal Credit Opportunity, prohibits creditors from discriminating against credit applicants on the basis of age, race, color, religion, national origin, sex, marital status or receipt of income from public assistance programs. It establishes guidelines for gathering credit information, for rating creditworthiness and for considering credit histories. It also requires written notification when credit is denied.
• Regulation C, Home Mortgage Disclosure (HMDA), provides data to help determine whether lenders are meeting the credit needs of their communities and complying with fair lending laws. HMDA requires certain institutions to report data, (such as race, income and gender) to its supervisory agency about home purchase and home improvement loans it originates, purchases or for which it receives an application. Data are available to the public.
• Regulation E, Electronic Fund Transfer, protects consumers who engage in electronic fund transfers by establishing rules governing documentation of electronic transfers, correction of errors, liability for lost or stolen EFT cards and pre-authorized transfer.
• Regulation M, Consumer Leasing, formerly part of Regulation Z, ensures meaningful and accurate disclosure of the terms of personal-property leases for personal, family or household use, allowing consumers to compare leasing and buying costs.
• Regulation Z, Truth in Lending, prescribes uniform methods for computing the cost of credit and for disclosing the cost in terms of both the finance charge and the annual percentage rate. In addition, Regulation Z addresses the disclosure of other credit terms, requires certain disclosures in credit advertising, outlines the procedures to follow in the case of a credit-billing dispute, provides certain other protections regarding credit cards, and governs the right to cancel certain residential transactions.
• Regulation AA, Unfair or Deceptive Acts or Practices, establishes procedures for filing consumer complaints about an alleged unfair or deceptive act or practice of a state member bank. Complaints about other types of depository institutions may be made directly to the Federal Reserve, which will forward them to the appropriate regulatory agency.
• Regulation DD, Truth in Savings, requires depository institutions to provide disclosures so consumers can make meaningful comparisons among depository institutions.
• Real Estate Settlement Procedures Act (RESPA) is a law covering the settlement process for residential real estate requiring advance disclosure to home buyers and sellers of settlement costs, the elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services, and a reduction in the amounts home buyers are required to place in escrow accounts established to insure the payment of real estate taxes and insurance. The Department of Housing and Urban Development enforce the act that is implemented through its Regulation X.

Some consumer-related statutes have no implementing regulation but are enforced by various federal regulatory agencies, depending on the type of institution involved. They are listed below.

• The Fair Housing Act prohibits discrimination in the sale, rental or financing of housing on the basis of race, color, religion, sex, familial status or national origin.
• The Fair Credit Reporting Act gives consumers the right to examine information in their credit records and sets out procedures for correcting errors in credit reports. It also sets limits on how long certain kinds of information may be kept in credit records and governs the privacy of credit reports.
• The Fair Debt Collection Practices Act establishes rules for collection of debts by certain individuals or agencies, prescribing methods of locating and contacting a debtor and prohibiting harassing or excessive contact in connection with collection of a debt.
• The Right to Financial Privacy Act establishes procedures that financial institutions must follow when releasing information about customers' accounts.

For more information, contact Diana Judge at the St. Louis Fed at (314) 444-8761.