AN OVERVIEW OF CONSUMER CREDIT
Credit allows individuals to finance transactions without having to pay the full cost of the merchandise at the time of the purchase. A common form of consumer credit is a credit card account issued by a financial institution. In 1968, Congress passed the Consumer Credit Protection Act to regulate the consumer credit industry. This Act requires creditors to disclose the terms of credit to consumers. It also protects consumers from excessive loan charges and garnishment of wages. The Act also created the National Commission of Consumer Finance to investigate the consumer finance industry. Both credit reporting agencies and credit card companies are regulated by the Act. In addition, the Act regulates debt collectors and it prohibits discrimination based upon marital status or gender.
In May, 2009, President Obama signed into law the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. This federal law contains several provisions regulating the practices of financial institutions that issue credit cards. The Act includes bans on practices such as unfair rate increases, late fees that result from bills that arrive close to the due date, and retroactive rate increases. The Act also mandates that credit card issuers provide their credit card contracts in plain language that consumers can understand. Terms must also remain fixed for the first year of the contract. The Act also contains increased penalties for companies that violate the law.
THINGS YOU NEED TO KNOW ABOUT MODIFICATION OF YOUR MORTGAGE
Many people are debating whether or not a modification of their mortgage terms is a good decision. For some people, modifying loan terms can have negative financial effects in the long term. For others, it is the only option that can truly help them avoid foreclosure. Some homeowners believe that if they are struggling with their mortgage payments, their lender will automatically offer to adjust their loan terms. However, in most cases, the homeowner has to make an affirmative request to modify loan terms. Generally, when a bank is faced with either having to foreclose on a property or modify the terms of a loan, they will work with a borrower to adjust the terms in a manner that is agreeable to both parties. However, borrowers have to take the first step and initiate the process with the lender.
Individuals do not have to be delinquent on their payments to apply for adjustment of their loan terms. If borrowers have suffered financial hardships, such as a layoff, reduction in salary, or high medical bills, they can take a pre-emptive step and request an adjustment of their mortgage loan terms. Borrowers do not have to wait until they are months behind on their payments and already receiving collection calls to take action.
When considering the pros and cons of modification of mortgage terms, borrowers need to consider both short term and long term benefits. In the short term, homeowners want to consider the amount by which they can reduce their monthly loan payments to make ends meet. In the long term, they will have to consider that an adjustment of their loan terms will usually require paying more interest over the term of the loan.
BUSINESSES SHOULD KEEP ALL EMAIL COMMUNICATIONS
The Sarbanes/Oxey Act has required all public companies to retain email and instant messaging documents since 2006.
It should be the custom and practice of businesses to maintain copies of all email correspondence. Email can be considered evidence in court and courts have made rulings that the failure to maintain and produce email records means that the business in question is hiding key evidence.
To protect your business, you should have a procedure in place to maintain email communications generated through the business. Failure to keep these records can lead to rulings in litigation that your business willfully destroyed evidence.
Therefore, if you run a business, you must develop a clear policy on email communications and train all
Prepared by Kristen B. Degnan