Start My Answer

What is the Consumer Credit Protection Act

Hannah Locklear | April 05, 2023

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

The CCPA protects you.

Summary: The Consumer Credit Protection Act (CCPA) is a landmark federal law establishing significant consumer protections when it comes to banking transactions, credit card company practices, and issues related to financial services. Since its enactment in 1968, the reach and impact of the CCPA has continued to expand.

The Consumer Credit Reporting Act (CCPA) is arguably one of the most important and impactful laws when it comes to financial transactions, consumer lending, debt collection, and other aspects of financial services. The CCPA, which was signed into law in 1968, instituted a number of regulatory restrictions on banking institutions, credit card issuers, debt collectors and so forth.

In addition, the CCPA introduced an array of regulatory and legal safeguards that consumers in the United States continue to utilize and access to this day.

For example, the CCPA serves as the bedrock legislation for a series of incredibly significant laws that govern and regulate the financial sector, including the Fair Credit Reporting Act, Equal Credit Opportunity Act and Fair Debt Collection Practices Act.

Financial institutions took advantage of consumers before the CCPA

Prior to the CCPA’s enactment, U.S. consumers were forced to work within the confines of requirements and stipulations set forth by banks, credit card companies, and so forth. Consumer rights were downright lacking when it came to lending, debt collection and the practices utilized for credit reporting.

Before 1968, financial institutions routinely took advantage of consumers. For example, financial institutions had zero legal obligation to disclose the terms of loans (including the costs associated with securing the loan), there were no legal limits for interest rates, and they were allowed to garnish a significant percentage of wages if a consumer fell behind on servicing a loan. All of this changed when the CCPA was signed into law.

The Truth in Lending Act added to the CCPA

The Truth in Lending Act (TILA) was a key component of the original CCPA and set forth the goal of ensuring “informed use” by consumers when accessing and utilizing credit. The TILA obligated lenders and credit card issuers to be more transparent by disclosing the terms of credit when someone applied to borrow money from a financial institution. For example, the TILA requires lenders and credit card issuers to disclose the following information in a clear and understandable manner:

  • Annual Percentage Rate (APR)
  • Finance Charges
  • Amount Financed
  • Payment Due Date
  • Late Fees
  • Prepayment Penalties
  • Total Number of Payments
  • Total Sale Price

The TILA also provided consumers with a 3-day “right of rescission” which afforded the chance to back out of a loan without incurring a financial penalty.

The CCPA established federal wage garnishment law

In addition to the TILA, the CCPA established the Federal Wage Garnishment Law. This component of the law was part of the original 1968 legislation, placing limits on lenders and other creditors in their efforts to access and garnish wages from a borrower who fell into default on a loan. As a result of the federal wage garnishment law, consumers are entitled to the following legal protections, even if a consumer is unable to repay the full amount of a loan:

  • Employers are not allowed to fire you as a result of your wages being garnished. Though, an exception to this prohibition is triggered if your wages are being garnished for more than one delinquent debt.
  • In most instances, no more than 25 percent of your after-tax wages may be subject to garnishment. Though, please be advised that there are exceptions to the 25 percent limitation. Specifically, child support, alimony and past-due taxes are not subject to the 25 percent cap.

The CCPA created the Fair Credit Reporting Act (FCRA)

Along with the TILA and federal wage garnishment law, the CCPA also served to establish one of the most important federal laws governing financial transactions—the Fair Credit Reporting Act (FCRA). The FCRA was added to the CCPA in 1970 and has been amended numerous times since its passage.

The FCRA provides U.S. consumers with an array of legal rights and protections when it comes to the information consumer reporting agencies are able to collect about them. For example, the FCRA obligates consumer reporting agencies (including Equifax, TransUnion and Experian) to make sure the information they collect and share about consumers is kept private, examined fairly, and is accurate. In addition, the FCRA provides the following legal rights and protections to U.S. consumers:

  • You have the legal right to access your own credit reports.
  • You have the legal right to challenge and dispute incorrect or incomplete information on a credit report, or reports.
  • Consumer reporting agencies must delete or correct inaccurate, incomplete or unverifiable items in your report. These corrections and/or deletions must typically be done within 30 days after submission of a dispute.
  • Different types of negative information related to past financial transactions and loans can only remain on your credit report for a finite period of time (usually between 7 and 10 years).
  • Only individuals and entities with a “permissible purpose” are allowed to access your credit information.
  • Employers can only access your credit report with your written permission.
  • You have the legal right to opt out and halt credit reporting agencies from sharing your information with lenders, insurance providers and others who might use that information for marketing purposes to send you prescreened offers.

If you feel like your rights, protected by the FCRA, have been violated, you can file a complaint with the CFPB here.

Key takeaways

Ultimately, the CCPA paved the way for a series of laws protecting consumers. Here are some key takeaways on the CCPA and its importance:

  • The Consumer Credit Protection Act (CCPA) provides notable protections for consumers to mitigate potential harm that may be inflicted by financial institutions, creditors, debt collectors, credit card companies, and so forth.
  • The 1968 law sets forth multiple disclosure requirements that must be followed by consumer lenders and other financial entities.
  • The CCPA obligates lenders to disclose the total cost of a loan or credit product, including how interest is calculated and what fees must be paid to obtain the loan.
  • The CCPA is a piece of bedrock federal legislation that included the enactment of other significant laws governing the financial sector, including the Truth in Lending Act, federal wage garnishment law, Fair Credit Reporting Act and so forth.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

We have answers

Join our community of over 40,000 people.

You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.

Get Started

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court

Not sued yet?

Use our Debt Validation Letter.

Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.

Let's Do It

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.

"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather

Get Started