CH. 44 Vocab

arm disclosure rules that apply to any loan:

1) a closed-ended consumer transaction 2) secured by the consumer's principal residence 3) longer than one year in duration 4) subject to interest rate variation

disclosure statement of HELCPA

1) a default on the loan may result in the consumer's loss of the dwelling 2) some conditions must be met, such as a time by which the consumer must submit an application to obtain the specific terms 3) the creditor, under certain circumstances, may terminate the plan and accelerate the outstanding balance, prohibit further extension of credit, reduce the plan's credit limit, or impose fees upon the termination of the account

3 remedies of ftc

1) affirmative disclosure 2) corrective advertising 3) multiple product orders

authority to promulgate glba privacy rules vested in:

1) depository institutions and many nondepository institutions in the cfpb 2) securities and futures-related companies in the sec and the commodity futures trading commission respectively 3) certain motor vehicle dealers in the ftc

4 changes to dodd-frank act in 2018

1) fund the bureau through congressional appropriations 2) require legislative approval of major bureau rules 3) ensure that the director answers to the president in the exercise of executive authority 4) create an independent inspector general for the bureau

3 policy statements of FTC act

1) meaning of unfairness 2) meaning of deception 3) ivolves ad substation

consumer financial product or service

a financial product or service that is "offered or provided for use primarily for personal, family, or household purposes."

limitations on diclaimers

a full warranty may not disclaim, modify, or limit any implied warranty; a limited warranty may not disclaim or modify any implied warranty, but may limit its duration to that of the written warranty, provided that the limitation is reasonable

affirmative disclosure

a remedy frequently employed; requires an offender to include in its advertisements certain information that will prevent the ads from being deceptive

home equity line of credit

a revolving line of credit using the consumer's home collateral for the loan

national association of attorneys general (NAAG)

active in coordinating lawsuits among the states

fair credit and charge card disclosure act

adds to TILA; requiring all credit and charge card applications and solicitations to include extensive disclosures whose requirements depend on the type of card involved and whether the application or solicitation is by mail, telephone, or other means

credit card accountability, responsibility, and disclosure act

also known as the credit card bill of rights or CARD; signed into law in 2009; amends the TILA to establish fair and transparent practices relating to credit cards

economic growth, regulatory relief, and consumer protection act of 2018

amended fcra; 1) require consumer reporting agencies to provide consumers with free credit freezes and free removal of credit freezes 2) increase the length of time consumer reporting agencies must include a fraud alert in consumer's file

consumer financial protection bureau (CFPB)

an independent executive agency housed within the federal reserve, which stands to regulate the offering and provision of consumer financial products or services under the existing federal consumer financial laws

interstate land sales full disclosure act (ILSA)

applies to sales or leases of one hundred or more lots of unimproved land as part of a common promotional plan in interstate commerce; requires developer to file with HUD a detailed "statement of record" containing specified information about the subdivision and the developer before offering the lots for sale or lease

fair credit billing act

attempts to relieve some of the problems and abuses associated with credit card billing errors; establishing procedures for the consumer to follow in making complaints about specified billing errors and requires the creditor to explain or correct such errors

food, drug and cosmetics act of 1938

authorizes the agency to regulate "adulterated and misbranded" products

adjustable rate mortgages (ARMs)

caused fed to amend regulation z; excludes open-ended lines of credit secured by the consumer's principal dwelling; require that the creditor provide the consumer with a consumer handbook on ARMs and a loan program disclosure statement covering terms offered

gramm-leach-bliley financial modernization act (GLBA)

contains provisions to protect consumers' personal financial information held by financial institutions and originally gave authority to eight federal agencies and the states to administer and enforce provisions

warranty

creates a duty on the seller's part to assure that the goods or services she sells will conform to certain qualities, characteristics, or conditions; seller not required to warrant what they sell or disclaim or modify a particular warranty or all warranties

close- ended credit

credit extended for a specific time, during which the debtor generally makes periodic payments in an amount at a time agreed upon in advance

freeman v. quicken loans, inc.

decision: judgement of the u.s. court of appeals is affirmed interpretation: RESPA does not prohibit the collection of an unearned charge by a single settlement-service provider but, instead, covers only a provider's splitting a fee with one or more other persons

ftc v. wyndham worldwide corp.

decision: the district court's opinion is affirmed interpretation: a company is entitled only to notice of the meaning of the statute and not to the agency's interpretation of the statute

household credit services, inc. v. pfennig

decision: the judgement of the court of appeals for the sixth circuit is reversed interpretation: the TILA requires credit providers to disclose finance charges of loans but does not require all fees associated with loans to be classified as finance costs

jerman v. carlisle, mcnellie, rini, kramer & ulrich LPA

decision: the judgement of the u.s. court of appeals for the sixth circuit is reversed; interpretation: the FDCPA was enacted to eliminate abusive debt collection practices and does not provide a defense for violations that result from mistakes of law

cease-and-desist order

directs a party to stop a certain practice or face punishment, such as a fine

home mortgage disclosure act (HMDA)

enacted by congress along with the community reinvestment act to emphasize to financial institutions the importance of their reinvesting funds in the communities that they serve; outlawed geographic discrimination, redlining

trouble asset relief program (TARP)

enacted by congress in 2008; program of the u.s. government that purchases assets and equity from financial institutions to strengthen the u.s. financial sector

magnuson-moss warranty act

enacted by congress to protect buyers and to prevent deception in selling; requires sellers of consumer products to provide adequate information warranties; provides for: 1) disclosure in clear and understandable language of the warranty that is to be offered 2) a description of the warranty as either "full" or "limited" 3) a prohibition against disclaiming implied warranties if a written warranty is given 4) an optional informal settlement mechanism

home equity loan consumer protection act (HELCPA)

enacted by congress to regulate the disclosures and advertising of home equity loan amends the TILA to require that lenders provide disclosure statement and consumer pamphlet at the time they provide an application to a prospective consumer borrower; applies to all open-ended credit plans for consumer loans that are secured by the consumer's principal dwelling

fair credit reporting act (FCRA)

enacted by congress; applies to consumer reports used to secure employment, insurance, and credit; prohibits the inclusion of inaccurate or specified obsolete information in consumers reports; requires consumer agencies to give consumers written advance notice before making an investigative report

real estate settlement procedures act (RESPA)

enacted by congress; to provide consumer home purchasers with greater and timelier information on the nature and costs of the settlement process and to protect them from unnecessarily high settlement charges; requires advance disclosure to home buyers and sellers of all settlement costs

lemon laws

enacted by state legislation to provide new car purchasers with rights that are similar to full warranties under the magnuson-moss warranty act

consumer product safety act (CPSA)

established an independent federal regulatory agency, the consumer product safety commission (CPSC)

national highway traffic safety administration (NHTSA)

established by congress to reduce the number of deaths and injuries resulting from automobile accidents; sets motor vehicle safety standards that promote crash prevention and crashworthiness; authorized to provide grants-in-aid for state highway safety programs and to conduct research on improving highway safety

federal trade commission (FTC)

established in 1914, has two major functions: 1) under its mandate to prevent "unfair methods of competition in commerce," it and the antitrust division of the department of justice are responsible for antitrust enforcement at the federal level 2) under its mandate to prevent "unfair and deceptive" trade practices, it is responsible for stopping fraudulent sales techniques

right of rescission

exists under the federal consumer credit protection act; allows a consumer three days during which he may withdraw from any credit obligation secured by a mortgage on his home, unless the extension of credit was from any credit obligation secured by a mortgage on his home, unless the extension of credit was made to acquire the dwelling

credit card fraud act

federal act prohibits: 1) possessing unauthorized cards 2) counterfeiting or altering credit cards 3) using account numbers alone 4) using cards obtained for a third party with his consent, even if the third party conspires to report the cards as stolen

mortgage reform and anti-predatory lending act

included in the dodd-frank act; enacted in 2010; sets minimum underwriting standards for mortgages by requiring lenders to verify reasonably and in good faith that consumer-borrowers have reasonable ability to repay the loan at the time the mortgage is granted; prohibits mandatory arbitration clauses and prepayment penalties for ARMs

federal communications commission (FCC)

independent u.s. government agency overseen by the congress; regulates interstate communications by radio, television, wire, satellite, and cable; fcc open internet rules of 2015 issued to protect and maintain open, uninhibited access to legal online content by prohibiting broadband internet access providers from blocking or slowing the delivery of internet connections

consumer product

is any item of tangible personal property that is normally used for family, household, or personal use and that is distributed in commerce

limited warranty

is any warranty not designated as full

consumer credit transaction

is customarily defined as any credit transaction involving goods, services, or land acquired for personal, household, or family purposes

regulation b

issued by federal reserve board (fed) to implement ECOA

fair debt collection practice act (FDCPA)

led congress; makes abusive, deceptive, and unfair practices by debt collectors in collecting consumer debts illegal

home equity loan

loan for a fixed amount of money that is secured by the consumer's home

unfairness

occurs when an injury: 1) is substantial 2) is not outweighed by any benefits to consumers or competition 3) is one that consumers themselves could not reasonably have avoided

deception

occurs when misrepresentation, omission, or practice that is likely to mislead a consumer acting reasonably in the circumstances, to the consumer's detriment is found by the commission

credit freeze

on a consumer credit report prohibits a consumer reporting agency from releasing information in a credit report without the consumer's express authorization

open-ended credit account

one that permits the debtor to enter into a series of credit transactions that they may pay off either in installments or in a lump sum

federal consumer credit protection act (FCCPA)

passed by congress; requires creditors to disclose finance charges (including interest and other charges) and credit extension charges and sets limit on garnishment proceedings

rules under fair credit billing act

preserves a consumer's defense against the issuer; 1) the seller is controlled by the card issuer or is under common control with the issuer 2) the issuer has included the seller's promotional literature in the monthly billing statements set to the card holder 3) the sale involves more than $50 and the consumer's billing address is in the same state as, or within one hundred miles of, the seller's place of business

equal credit opportunity act (ECOA)

prohibits all business that regularly extend credit from discriminating against any applicant for credit on the basis of race, color, sex, marital status, religion, national origin, age, or receipt of public assistance

consumer review fairness act of 2016 (CRFA)

protects people's ability to share their honest opinions about a business's products, services, or conduct, in any forum, including social media; makes it illegal to use a contract provision that: 1) bars or restricts the ability of a person who is a party to that contract to review a company's products, services, or conduct 2) imposes a penalty or fee against someone who gives a review 3) requires people to give up their intellectual property rights in the content of their reviews

presale disclosure

provisions calculated to prevent confusion and deception and to enable purchasers to make educated product comparisons

consumer product safety commission (CPSC)

purposes: 1) to protect the public against unreasonable risks of injury associated with consumer products 2) to assist consumers in evaluating the comparative safety of consumer products 3) to develop uniform safety standards for consumer products and to minimize conflicting state and local regulations 4) to promote research and investigation into the causes and prevention of product-related deaths, illnesses, and injuries

multiple product orders

require a deceptive advertiser to cease and desist from any future deception not only in regard to the product in question but also in regard to all products sold by the company; helps when dealing with companies that have repeatedly violated the law

annual percentage rate (APR)

required in TILA; quotes of sales finance and interest rates; must be calculated on a uniform basis

corrective advertising

requires an advertiser who has made a deceptive claim to disclose in the future advertisements that such prior claims were in fact untrue

ad substantiation

requires that advertisers have a reasonable basis for their claims at the time they make such claims

regulation z of TILA

responsibility of enforcement and interpretation of TILA; this role was transferred to the CFPB

voluntary safety standards

rules for which noncompliance does not violate the law

mandatory safety standards

rules that regulate product design, packaging, and warning labels that manufacturers must follow or they will face legal sanction

dodd-frank wall street reform and consumer protection act (dodd-frank act)

signed into law by president obama in 2010; most significant change to u.s. financial regulation since the new deal; established the consumer financial protection bureau (CFPB)

current federal consumer financial regulatory system

split among 7 different agencies: office of the comptroller of the currency, office of thrift supervision, federal deposit insurance corporation, federal reserve, national credit union administration, department of housing and urban development (HUD), the FTC

transferred acts

the federal hazardous substances act, the flammable fabrics act, the poison prevention packaging act, the refrigerator safety act

food and drug administration (FDA)

the oldest federal consumer protection agency (est. 1906) enforces the food, drug, and cosmetic act of 1938; responsible for protecting and promoting public health through the regulation and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs, vaccines, biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices, veterinary products, and cosmetics

redlining

the process by which financial institutions refuse to provide reasonable home financing terms to qualifying applicants whose homes are located in geographic areas of declining value

full warranty

the warrantor must agree to repair the product, without charge, to conform with the warranty; no limitation may be placed on the duration of any implied warranty

truth-in-lending act (TILA)

title one of the fccpa; amended by the doss-frank act; superseded state disclosure requirements relating to credit terms for both consumer loans and credit sales; does not cover credit transactions for business, commercial, or agricultural purposes

primary goal of CFPB

to ensure that all consumers have access to markets for consumer financial services and products are fair, transparent, and competitive