Governing Laws
State Laws Numerous state laws govern consumer transactions. Among the key statutes are: State Credit Laws These laws regulate most of the essential terms of consumer credit. They include various enactments regulating: small loans, retail installment sales, motor vehicle installment sales, home solicitation contracts, revolving charge accounts, credit union loans, pawnbrokers, second-mortgage and home finance lending and insurance premium financing. In California, see Retail Installment Sales Act (Unruh Act), Civil Code §§ 1801 et seq.; Automobile Sales Finance Act (Rees-Levering Motor Vehicle Sales and Finance Act), Civil Code §§2981 - 2984.4; and Home Solicitation Act, Civil Code §§ 1689.5 - 1689.3. Unfair Deceptive Acts and Practices Laws (UDAP) These laws prohibit unfair, false and fraudulent practices against consumers and provide them with a private right of action for violation of their provisions. In California, see the Consumer Legal Remedies Act at Code of Civil Procedure §§ 1750 - 1784. Truth in Lending Laws Many states have truth in lending laws in one form or another requiring disclosure of credit charges. Consumer remedies and civil and criminal penalties are provided for violations. Some states have separate laws embodying these disclosure requirements; others include these provisions as part of other statutes -- usury laws, retail installment sales acts or motor vehicle acts. In California, there are the Unruh and Rees-Levering Acts discussed above. Garnishment Laws State laws control such areas as wage amounts that are exempt from garnishment, special exemption provisions and out-of-state earnings. They also set priorities among types of debts. In California, see Code of Civil Procedure §§ 706.010 et seq. Uniform Commercial Code (UCC) The UCC has been adopted in every state except Louisiana. It covers the areas of sales of goods and secured transactions that are central to every consumer transaction. Variations exist in the UCC as adopted in each state which are relatively minor in the context of the entire Code, but which may be important in certain consumer transactions. The UCC provisions that have had the greatest impact on consumer transactions are the sections on unconscionability and the warranties. See California Commercial Code. Uniform Consumer Credit Code (UCCC) The UCCC was drafted to provide a comprehensive uniform body of consumer credit law in the states. It has been opposed by consumer and creditor advocates alike and has been adopted in relatively few states. Contract Law General contractual principles such as rules about capacity, consideration, Statute of Frauds, breach and other performance issues are relevant to consumer transactions. Most of these rules are developed by each state's common law. Debt Collection Regulation of debt collection practice either is included in a major state consumer protection law or is a separate act. The laws prohibit specific activities of merchants, creditors and debt collectors and provide penalties for violations. See California Fair Debt Collection Practices Act, Civil Code §§1788 - 1788.32. Consumer Credit Reporting Acts Many states have enacted laws regulating credit reporting agency activities. They set out the permissible consumer report uses and information that reporting agencies must disclose to consumers. In California, see Consumer Credit Reporting Agencies Act Civil Code §§1785.1 - 1785.35; Investigative Consumer Reporting Agencies Civil Code §§ 1786 - 1786.56; and The Holden Credit Denial Disclosure Act, Civil Code §§1787.1 - 1787.3.
Federal and State Regulations Federal and state laws often authorize administrative agencies to promulgate regulations that define more particularly statutory requirements. The Federal Trade Commission and the Federal Reserve Board are two of the major agencies responsible for implementing and enforcing several federal consumer laws. Usually responsibility for administration of state laws is scattered among several agencies.
Judicial Decisions At both federal and state levels, courts interpret all the above statutes and regulations. In addition, courts sometimes use traditional doctrines to create new rights for consumers. For example, traditional remedies for fraud, invasion of privacy and breach of contract have been interpreted by courts in many states to extend protections to consumers.
Federal Laws
![Most federal consumer laws are part of the Consumer Credit Protection Act (15 U.S.C. §§1601 et seq.) Some of its key provisions include the: Equal Credit Opportunity Act 15 U.S.C. §§ 1619 - 1691f Makes it illegal to discriminate in any credit transaction on the basis of race, color, religion, national origin, sex or marital status, age, that all or part of applicant's income is from a public assistance program and the applicant's good faith exercise of a right under the Consumer Credit Protection Act; Fair Credit Reporting Act 15 U.S.C. §§ 1681 - 1681lt Establishes the permissible content and use of credit reports by credit reporting agencies and provides for consumer access to such reports; Truth in Lending Act 15 U.S.C. §§ 1601 - 1667e Requires creditors in extending consumer credit to disclose in advertising and person-to-person transactions essential credit terms before credit is extended; Restrictions on Garnishment 15 U.S.C. §§ 1661 - 1667 Limits the earning amount subject to garnishment and the employer's right to fire an employee because of garnishment; Magnuson-Moss Warranty Act 15 U.S.C. §§ 2301 -2312 Requires minimum disclosure standards for written consumer product warranties; Fair Debt Collection Practices Act 15 U.S.C. §§ 1692 -1692o Governs the conduct of debt collectors who regularly collect debts owed to someone else. Some of these laws are very detailed and others are vague, leaving the details to be filled out by regulations or the courts. Some contain provisions that allow the states to give consumers more rights; others may preempt state laws in certain areas. Under some preemption statutes, states may have the right to opt out of the effects of federal preemption. Another major federal law is Section 5 of the Federal Trade Commission Act that regulates deceptive or unfair trade practices [15 U.S.C. §45(a)(1)]. The Federal Trade Commission is responsible for implementing regulations and enforcing its provisions.](consumer_law.jpg){kind=link}