Consumer Credit Protection Act Flashcards, test questions and answers

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What is Consumer Credit Protection Act?

The Consumer Credit Protection Act (CCPA) was enacted in 1968 as a way to protect consumers from unfair and deceptive practices by lenders. The Act requires lenders to disclose certain information to borrowers, such as the total amount of fees and interest that will be charged. It also limits the amount of security deposits that can be required for loans and sets standards for repayment plans or other workout arrangements. Finally, it provides legal recourse for those who experience harassment or other illegal conduct from creditors. The CCPA protects consumers by preventing lenders from taking advantage of them through high interest rates and hidden fees, setting limits on how much security deposits can be taken out, making sure that all agreements are clearly stated and understood by both parties, providing options in case of financial hardship like repayment plans or consolidation loans, and allowing individuals who face harassment or illegal behavior from their creditors to take action in court. When applying for a loan, it is important to understand your rights under the CCPA and how they will affect your situation. Borrowers should ensure that all terms are clearly explained before signing any contract so there is no room for misunderstanding down the road. Additionally, borrowers should take extra caution if they are dealing with a lender who does not appear legitimate or has engaged in unethical practices such as abusive debt collection tactics. By being aware of their rights under the CCPA, borrowers can better protect themselves against predatory lending practices.