Consumer Banking and Credit

Consumers face increasingly complex financial conditions. The profit motive of publicly-held banks and other financial institutions can lead to business practices that harm consumers and the broader economy. Identity Theft can wreak havoc with your credit history.

Consumer Banking Resources:
Cal. Financial Code s 264
Cal. Financial Code s 864(b)
(Bank may not set off account such that balance is less than $1,000)
Cal. Civ. Code s 3336666

Credit Card Resources:
Overview of the CARD Act
The Credit CARD Act protects consumers in the following ways:

Ban on Retroactive Rate Increases.
The Act prohibits retroactive interest rate increases and eliminates “universal default,” a practice where a credit card issuer raises interest rates due to lateness or default with other creditors (despite the cardholder being in good standing with the credit card issuer in question).

Consumer Protections from Credit Repair Organizations
Credit repair clinics often promise consumers that they will permanently remove negative information from credit reports, for a fee.

Prohibited Practices Under the CROA
Pursuant to Title 15 of the United States Code Section 1679, the CROA prohibits credit repair organizations from the following:

Making any statement which is untrue or misleading with respect to a consumer’s credit standing

Making any statement to alter a consumer’s identification for the purpose of either preventing the display of the consumer’s credit history or concealing negative information

Making any untrue or misleading representation with regard to the organization’s services

Engaging in any act of fraud or deception in connection with the offer or sale of services

Among the acts that would constitute fraud or deception by a credit repair organization are receiving payment before the full performance of a promised service, or promising to remove information that cannot legally be removed (such as a record of bankruptcy before 10 years have expired).

The Institutions and Individuals Subject to the CROA

These prohibitions apply to:
Any consumer reporting agency, or
Any person who has extended credit to a consumer, or
Any person to whom the consumer has applied or is applying for an extension of credit

Written Requirements of the CROA
The services that a credit repair organization promises to perform must be detailed in a written contract, including how long it will take to fully perform the services. In addition, the organization is obligated to inform consumers of their rights in a separate written disclosure statement, before entering into a contract.

Consumer Financial News:

Identity Theft

Consumer Sentinel Databook

Fair Credit Reporting Act