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Paper Topic:

Discuss government regulation in the area of consumer credit, identifying key legislation and what rights it grants consumers.

Consumer Credit 1

Running Head : Consumer Credit

Consumer Credit

Consumer Options for Receiving and Maintaining Credit

Name

School

Essay assignment reviewing government regulation on consumer rights regarding credit

Professor 's Name

March 2007

Consumer Credit 2

In the hit television series Cheers , Norm (a bar regular frequently walked out of the bar without paying for his beer . While some nights Sam (the bartender ) would buy Norm a beer , more often than not Norm was repeatedly reminded of his bar tab . This tab ' was the bar 's

br form of a credit extension , in which Norm could drink now and pay later For as long as it has existed , credit , or the granting of funds to be repaid at a later date , has been the American way (Wikipedia , 2005 People get what they want or need now , and have the option of deferred repayment . Unlike what Hollywood portrays , credit is no longer a privilege that can be granted with a simple handshake . The government has stepped in to ensure that everyone has an opportunity to understand and receive credit , and dispute any erroneously reported credit issues (Fed , 2001 . The Consumer Credit Protection Act , the Equal Credit Opportunity Act and the Fair Credit Reporting Act paved the way for credit fairness . These legislations have enabled Americans to become educated in their rights as consumers to borrow money , understand credit options , and to be informed of available options when an error in credit reporting has occurred

The Consumer Credit Protection Act of 1968 is widely recognized as the act that launched Truth and Lending disclosures (Fed , 2001 . A Truth and Lending disclosure is a document that outlines the terms of a loan in for a consumer to compare their lending options with all lending sources prior to entering into any loan agreement (Schroeder 2004 . This disclosure advises the consumer of what the cost of borrowing money will be . With this information , the consumer is able to shop around ' before entering into an agreement with a financer . The Equal Credit Opportunity Act requires that persons applying for credit be considered based on their creditworthiness , and not on their race sex or other personal characteristics that could place prejudgment on their creditworthiness . Additionally , this act

Consumer Credit 3

requires that a lender inform the consumer in writing whether or not he has been approved for credit , and when the latter is the case , the lender must inform the consumer of the reason (s ) why he was denied credit (Fed , 2001 . Lastly , the Fair Credit Reporting Act allows the consumer to be informed of what their credit report consists of , and provides pathways to dispute any noted errors . Furthermore , to protect the consumer 's privacy , this act only grants access to those with the legal capacity and need to view your credit

Good credit is the key to buying a car , a home , and in some cases getting a job . Thanks to government regulation , the consumer now has a fair opportunity to not only receive credit...

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