Your Rights As A Consumer Of Financial Services

I. BORROWERS TOO HAVE RIGHTS

Many people who borrow money believe that all of the rights and advantages of a loan contract go to the lender. Certainly lenders have significant rights as they must have to secure the return of their funds. If the lender is a bank or other financial institution most of the funds belong to the public. Therefore lenders must have rights such as seeking relief in the courts or repossession of goods to return borrowed money. Thanks to extensive laws passed over the past four decades borrowers in the United States also have significant rights. Sadly many borrowers are unaware of these rights or have little knowledge of how to take advantage of them. Below is a summary of key consumer protection laws in the U.S. that support financial service consumers today.

II. THE TRUTH IN LENDING ACT OF 1968

1. Required full disclosure of loan terms to a borrower in easily understood language and in writing.
2. A borrower has the right to cancel (rescind) a credit agreement within 3 business days if their home is used as collateral (with exceptions for first mortgages more than 4 installments personal loans and non-business purposes).
3. The lender must state in writing the Annual Percentage Rate (APR) and all finance charges before signing the loan agreement.
4. Advertising must be truthful. If favorable terms are cited all relevant terms must also be stated.

III. THE FAIR CREDIT AND CHARGE CARD DISCLOSURE ACT OF 1988

Two decades after the Truth in Lending Act this law extended protections to credit cards so customers know what they must pay and the rules for accepting a card. Customers must be informed of:

• The APR or annual percentage rate applicable to borrowings.
• How the APR is calculated on variable-rate cards.
• How the credit balance is determined each month.
• Any annual fees.
• If there is a minimum finance charge.
• Any transfer fees cash advance fees late payments or penalties for exceeding credit limits.

All terms must be in writing in easily readable type. Most card companies provide a toll-free number to answer customer questions.

IV. FAIR CREDIT BILLING ACT OF 1974

1. Disputes over charges must be addressed by letter within 60 days of the bill mailing; resolution is normally expected within 90 days.
2. Disputed amounts may be withheld without being reported as delinquent; non-disputed charges must be paid.
3. If the lender fails to respond they forfeit the disputed amount up to $50.

V. FAIR CREDIT REPORTING ACT OF 1970

Borrowers have the right to review their credit records maintained by credit bureaus. Reports usually contain:

• Name
• Current and previous addresses
• Social Security number
• Birth year
• Current and previous employers
• Spouse’s name if married
• Credit accounts (type opening date limit co-signers payment history judgments bankruptcy liens and recent inquiries)

1. If an error is found the credit bureau must respond and correct it. Lenders must provide the bureau used for loan denial. Borrowers can request a free copy within 60 days and request corrections.
2. Borrowers may insert a 100-word statement explaining circumstances of damaging but true information.
3. Credit reports are privileged. Access is allowed only to authorized individuals or with legal reason. Common users include lenders employers insurance companies landlords government agencies and courts. Checking reports before major loans or job applications is advised. Major credit bureaus: Equifax (800-685-1111) Experian (888-397-3742) TransUnion (800-888-4312).
4. Since 2003 borrowers may request a free credit report from each major bureau once every 12 months at www.annualcreditreport.com. Scores are not free; usually $10–$15.

VI. CONSUMER LEASING ACT OF 1976

1. Full lease terms must be quoted in writing for personal property with more than four lease payments not for business use.
2. Disclosure must include all charges insurance cancellation terms late fees payment schedules and warranties.
3. Terms such as “normal wear and tear” must be defined; balloon payments and purchase options must be disclosed.

VII. THE EXPEDITED FUNDS AVAILABILITY ACT OF 1987

1. Checking account customers must be informed about deposit acceptance and crediting.
2. Customers must know how long to wait after deposits to access funds. Policies must be displayed in bank lobbies.
3. Funds are typically available within 1–5 business days depending on deposit type. Exceptions require notice to the customer.

VIII. THE TRUTH IN SAVINGS ACT OF 1991

1. Full disclosure of deposit account terms including interest calculations fees and penalties.
2. Misleading advertising is prohibited; all relevant terms must be disclosed.
3. Significant changes in deposit terms must be communicated in writing typically 30 days in advance.
4. Annual Percentage Yield (APY) statements must be based on average balances not minimum balances.

IX. EQUAL CREDIT OPPORTUNITY ACT OF 1974

1. Lenders cannot discriminate based on age sex color ethnicity marital status religion public assistance or exercise of consumer rights.
2. Consumers feeling discriminated against should contact the provider first then the lender’s supervisory agency and possibly the DOJ if serious.
3. Women may access credit independently; spouses may have separate credit histories.
4. Lenders may consider age for contract validity but not deny credit solely for age 62+.
5. Applicants must be notified of approval/denial within 30 days with written reasons.

X. FAIR HOUSING ACT OF 1968

1. Prohibits discrimination in lending for new residence purchases.
2. Prohibits discrimination in lending for home renovations or remodeling.

XI. HOME MORTGAGE DISCLOSURE ACT OF 1975

1. Lenders must disclose geographic location of home mortgage and improvement loans to detect discrimination.
2. Loans cannot be denied based solely on neighborhood location.

XII. COMMUNITY REINVESTMENT ACT OF 1977

1. Lenders must designate trade territories and make an affirmative effort to serve all areas.
2. No deliberate exclusion of areas (“redlining”).
3. Credit needs of all customers must be met.
4. Lenders must maintain public files with customer comments.
5. Regulatory agencies review performance and assign ratings: O (outstanding) S (satisfactory) N (needs improvement) SN (substantial noncompliance).

XIII. ADDITIONAL SOURCES OF INFORMATION

Published sources summarize consumer rights laws and updates. Key resources include:

• Board of Governors of the Federal Reserve System – www.federalreserve.gov
• Federal Deposit Insurance Corporation (FDIC) – www.fdic.gov
• Office of the Comptroller of the Currency – www.occ.treas.gov
• Office of Thrift Supervision – www.ots.treas.gov
• National Credit Union Administration – www.ncua.gov

These agencies provide free pamphlets guidance and updates on consumer rights regulations and dispute resolution.