Consumer Credit Protection Act

Scope

The Consumer Credit Protections Act is designed to protect consumers.

Regulatory citations

• None

Key definitions

• None

Summary of requirements

Since 1968, credit protections have multiplied. Generally, the Act:

• Ensures consumers are told the cost of borrowing;
• Prohibits unfair discrimination in credit transactions;
• Ensures consumers are told why credit is denied;
• Allows consumers access to credit records;
• Provides a way to settle billing disputes; and
• Reduces credit problems and confusion.

CCPA is currently divided into six subchapters as follows:

1. Subchapter I: Consumer Credit Cost Disclosure
2. Subchapter II: Restrictions on Garnishment
3. Subchapter III: Credit Reporting Agencies
4. Subchapter IV: Equal Credit Opportunity
5. Subchapter V: Debt Collection Practices
6. Subchapter VI: Electronic Fund Transfers

Employers will want to focus their attention on Subchapters II and III.

Wage garnishment. Subchapter II of the Act protects employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of an employee’s earnings that may be garnished in any one week. Subchapter II applies to all employers and individuals who receive earnings for personal services (including wages, salaries, commissions, bonuses and income from a pension or retirement program, but ordinarily not including tips). See Garnishment for more information.

Consumer reports. Subchapter III of the Act, also known as the Fair Credit Reporting Act (FCRA), protects individuals by requiring consumer reporting agencies providing information to adopt procedures that promote confidentiality, accuracy, relevancy, and proper use of that information. Subchapter III affects employers and consumer reporting agencies. See Fair Credit Reporting Act for more information.