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Consumer Protection Acts in Financial Regulations that You Should Know

Consumers are protected from exploitation by the government through the consumer protection laws in its financial regulations. Each consumer protection act in financial regulations is limited by the omissions. Here is a discussion on some of the essential consumer protection acts in financial regulations.

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 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 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.

Government officials cannot gain access to personal financial records if they lack a written consent, a search warrant or a subpoena as required by the financial privacy act. 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. Companies and large groups like labor unions and trade associations are not included in this law for it only protects partnerships of five or less than five members and individuals alone. This law governs 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.

Federal Reserve Board in 1985 adopted the credit practices rule to protect the consumers who were in debt. 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.

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