The Fair Credit Acts are designed to help consumers receive equitable treatment and consideration when applying for credit. Four variations of the bill apply to fair credit, the Fair Credit and Card Disclosure Act, the Fair Credit Billing Act, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The original acts, all of which have been amended over time, sprung from the original Truth In Lending Act from the 1970s.
Truth In Lending Act
In 1968, Congress enacted the original Truth In Lending Act (TILA). The famous "Regulation Z" specified the rules imposed on all lenders to fairly disclose the annual percentage rate (APR) of loans and the true cost of borrowing. The regulation applied to all lenders and established monetary penalties for any disclosures that were more than one-eighth of 1 percent higher or lower than the stated interest rate.
Fair Credit Billing Act (FCBA)
The Fair Credit Billing Act of 1986 is another important amendment to the original Truth In Lending Act; it primarily regulates credit cards and other open-ended credit. The CARD (Credit Card Accountability, Responsibility and Disclosure) Act of 2009 added many new details that meld with the FCBA that address the many "billing errors" that often seem to occur on open-end loans, credit cards and other charge accounts. Requirements for prompt billing, explanation of creditors' rights, prompt payment posting and fast resolution of errors are some of the important components of this fair-credit legislation.
Fair Debt Collection Practices Act (FDCPA)
This federal regulatory act targets reducing abuse and unfair practices of debt collectors. Members of Congress had been bombarded with consumer complaints of collectors calling in the middle of the night, threatening borrowers, spouses and children, claiming to have the power to punish delinquents, and even calling borrowers' employers divulging credit woes. The Fair Debt Collection Practices Act made these and other abusive practices illegal. For example, you should never receive a collections call after 9 p.m. Such calls violate federal law.
Fair Credit Reporting Act (FCRA)
This regulation defined the parameters applied to credit reporting agencies, including what they reported and how consumer credit reports must be structured. Long before HIPAA (Health Insurance Portability and Accountability Act) was implemented in 1996, the FCRA also restricted certain medical information from appearing on standard credit reports.
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