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Essential Consumer Protection Acts in Financial Regulations

Consumers are protected from exploitation by the government through the consumer protection laws in its financial regulations. There are exceptions to every consumer protection act in financial regulations. Here is a discussion on some of the essential consumer protection acts in financial regulations.

In 1968, the Congress enacted a consumer credit protection act to protect the consumers and their financial records from abuse. 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. The government has been forced to formulate more laws that control the limit that one should gather data about the financial history of another person and things they should do and not do with the data because data theft by cybercriminals, underground and legal market for data and data analytics is growing rapidly.

The government cannot access your personal financial records beyond a specified limit as defined by the right to financial privacy act. 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 applies to the federal government and its agents, officers, agencies and departments alone but not the local or state governments. The investigators must mail the account holder a notification and wait for response for 10-14 days after the mailing date before they are allowed to start a search that should also be authorized. The act protects partnerships of five or less than five members and individuals and excludes companies and large groups like labor unions and trade associations. 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 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.

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