Personal Banking Regulations

Personal banking options are used by the majority of Americans. For this reason there are clear standards in place, and the activity of financial institutions is regulated by the Federal Government. It is important that consumers have faith in the banking system so that they can bank with confidence.

• The Truth in Lending Act was established to help consumers feel more confident when securing a loan from a financial institution. This act states that all information pertaining to the loan such as interest rates, total repayment amount including interest and payment schedule be presented to the recipient of the loan prior to signing the loan installment agreement.

• The process of fair credit reporting is also handled by the Federal Government. Fair credit laws establish what information can be reported to a credit agency by a bank as well as how the process is to be handled if there is derogatory information placed onto a credit report by a bank that is deemed to be inaccurate.

• The Gramm-Leach-Bliley Act protects consumer information. This act defines the way in which non-pubic personal information is to be handled by financial institutions. Laws are also in place under this act that state that precautions must be taken to protect customer’s personal information such as Social Security number and financial records.

• Overdraft fees are also regulated. Financial institutions must give you the option to have overdraft protection on an account. This service will automatically pull the funds for the transaction out of a savings account to pay the balance of the charge.