Policy on Responsible Lending
Lenders are required to abide by applicable federal, state and local laws. This may include interest rate limits, loan terms, limits on rollovers, the number and frequency of loans, fees, and more. Before you accept any loan, you should educate yourself in regard to the loan you are seeking, including the rules, regulations and laws that might apply to that loan and the lender offering it.
Fair Debt Collection Practices Act
After you enter into a loan repayment schedule, you are protected by the Fair Debt Collection Practices Act (FDCPA), which is overseen and enforced by the Federal Trade Commission. Lenders are required to abide by the FDCPA, which includes the following rules (this applies both to lenders and those working on behalf of the lenders):
- They may not contact you by phone before 8:00 am or after 9:00 pm in your time zone;
- They may not use abusive language toward you;
- They are prohibited from using deception to attempt to collect a debt from you;
- They are not allowed to threaten legal action against you if they either can’t or don’t intend to pursue such legal action.
Truth in Lending Act (TILA)
The Truth in Lending Act requires lenders to give you in writing the exact fees, interest rate and other details regarding your loan. This should be presented to you prior to any agreement being executed. Lenders may not offer terms that exceed any applicable laws, regulations, or rules. Most specific terms of your loan will be governed by the applicable state law.
Dodd-Frank Wall Street Reform Act
The Dodd-Frank Act requires that all lenders practice fair lending. The Act empowers the Consumer Financial Protection Bureau (CFPB) to issue regulations that prohibit abuse and unfair lending practices, which includes regulations designed to prevent disparities among consumers of equal creditworthiness but are of a different race, ethnicity, gender or age.
Opening a New Account (including loans) Requires Disclosure of Personal Information
Federal law requires lenders and other financial institutions to know who they are working with. The law is designed to fight money laundering and funding of terrorist networks. Therefore, you may be required to provide your name, date of birth, address, your social security number and other information. Your lender may ask you to provide a valid state or federal ID to verify your personal information.