New Regulations Created to Protect Consumers and their Credit

While the credit crunch and consequential economic recession has taken its toll in many ways, the one silver lining may well be the resulting lessons learned.  Many practices that once were common among banks and creditors have now been deemed misleading and detrimental to the individual and congress has started to take action to protect consumers, and ultimately the economy as a whole.

To help consumers avoid mistakes of the past, The Consumer Financial Protection Bureau has been conceptualized to look out for the financial wellbeing of consumers rather than just banks.  This agency was founded by Harvard professor and consumer advocate Elizabeth Warren and aims to essentially cut out the fine print and act on behalf of consumers to bring full clearer disclosure to the credit and lending industry.  The bureau will be housed within the federal reserve and enforce new regulations for banks, mortgage lenders, credit card, and private student loan companies, as well as payday lenders.  Small businesses will sit on panel within the group in order to ensure that new rules will not have any unintended and unjust consequences for small businesses.  The bureau is already beginning to see that regulations surrounding credit cards, debit cards, mortgages, and credit scores are being met.  Some of the recent policies to be enforced include:

Credit Cards:  Congress has imposed a maximum of $10 for credit card companies to impose minimum card use.  Merchants are no longer able to charge different prices according to use of different credit cards even though they are allowed to charge different rates for cash versus credit.

Mortgages:  Lenders have to check borrowers income and assets thoroughly during the approval process. 
Credit Scores:  Credit scores are now free once a year for all Americans and can be accessed on annualcreditreport.com.  The report includes each of the three credit reporting bureaus: Equifax, Experian, and transunion.

Auto dealers, stock brokers, and annuity salespeople are exceptions many consumer protections rules.  Individual consumers still need to watch their own credit – if there are any blemishes on your credit report, a CredTEK trained professional can assist you in repairing your credit.