What is the Consumer Credit Protection Act (CCPA)?

The Consumer Credit Protection Act (CCPA) of 1968 is a federal law that helps ensure consumer protections related to things like privacy, credit access, credit reporting and debt collection. It requires financial institutions to share clear and easily understandable information about financial products and services. And it can help protect consumers from unfair lending practices.

What you’ll learn:

• CCPA rules apply to banks, lenders and other financial institutions.

• Multiple laws fall under the CCPA, including the Federal Wage Garnishment Law, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act and the Fair Debt Collection Practices Act.

• The CCPA is separate from the Consumer Financial Protection Act, which established the Consumer Financial Protection Bureau.

Among other things, the CCPA can protect consumers by requiring creditors to be fully transparent about their lending practices. It comprises a number of separate consumer protection laws, including:

The Federal Wage Garnishment Law, sometimes referred to as Title III, limits the amount of wages that can be garnished to pay off debt. Additionally, this law generally protects employees from being fired if the garnishment is happening because of a single debt.

The Equal Credit Opportunity Act (ECOA) protects credit applicants from being discriminated against because of their race, color, religion, national origin, sex, marital status or age. The ECOA seeks to prevent discrimination if credit applicants receive income from a public assistance program or if they’ve exercised their consumer protection rights.

Under the ECOA, lenders and creditors can only make lending decisions and set loan terms based on the applicant’s creditworthiness.

The Fair Credit Reporting Act (FCRA) controls how credit reporting agencies collect, use and share the information found in a person’s credit report. For example, a borrower’s credit information can only be shared with someone who has a specific reason for needing it, like a potential lender. 

You can request a copy of your credit reports from each of the three main credit bureaus, Experian®, Equifax® and TransUnion®, each year by visiting AnnualCreditReport.com. You can also use CreditWise from Capital One to monitor your credit.

The Truth in Lending Act (TILA) requires lenders and creditors to disclose the financial terms of any loans or lines of credit they provide so that consumers can more easily compare offers from different providers. Terms covered can include: 

• Annual percentage rates (APRs)

• Interest rates

• Potential fees

• Loan term lengths

The TILA also sets liability limits for unauthorized credit card charges, has rules for when lenders can change interest rates, and prohibits creditors from using misleading advertising methods.

The Fair Debt Collection Practices Act (FDCPA) seeks to eliminate unfair and abusive debt collection practices by limiting how often and when borrowers can be contacted. Plus, the FDCPA protects lenders and creditors from unfair competition with less reputable debt collectors.

The Electronic Fund Transfer Act (EFTA) protects consumers using electronic transfer methods like automated teller machines (ATMs), point-of-sale (POS) terminals and automatic bank withdrawals. It requires that lenders disclose terms and conditions for automatic transfers, including fees, consumer rights and limits on transfer amounts.

The CCPA includes protection from discrimination, regulations on how credit information is handled and limits on debt collection. 

Using credit responsibly can have its advantages, especially with these protections in place. Learn more about the benefits of using a credit card.