The Top 7 Consumer Protection Laws All AFCs Should Know

Written By: Karina Pribil-Corbett

What a year 2025 has been for consumer protection—and not in a good way. With the declawing of the CFPB and the repeal of the Overdraft Rule, financial counselors are left asking: What protections are still in place for the people we serve?

In this guide, the AFC Government Relations Task Force breaks down the top 7 consumer protection laws every financial counselor should know. Because in a world of rapid political shifts, it’s more important than ever to know which rights remain and how to help clients defend them.

Truth in Lending Act (TILA):

TILA ensures that when people borrow money, they aren’t being misled. It requires lenders to clearly spell out the terms of credit—like the APR, total finance charges, and the full payment schedule. Borrowers also have the right to cancel certain types of loans within three business days without penalty (Office of the Comptroller of the Currency, 2019)

Both the Office of Financial Readiness and the Office of the Comptroller of the Currency offer handouts that summarize key points of TILA for financial professionals to share with clients. However, TILA doesn’t cover everything. For instance, business loans and certain student loans (like those over $50,000) are exempt (Truth in Lending, 2009). This can leave graduate students particularly vulnerable. That’s why counselors should always encourage clients to read the fine print and understand the full cost of borrowing before signing anything.

Fair Credit Reporting Act (FCRA):

Credit reports affect everything from mortgages to job applications, so the accuracy of that information is crucial. The FCRA gives people the right to know what’s in their credit reports and to dispute any errors they find. It also limits who can access this information—for example, an employer needs written permission first (Federal Trade Commission, 2013).

Clients can check their credit for free once a year at AnnualCreditReport.com. And if they’re ever denied credit or a job because of something in their report, the company must let them know why and provide the name of the credit bureau that reported it.

Financial counselors can offer clients a summary of these rights through a handy FTC handout that also explains how to file a complaint if their rights are violated.

Fair Debt Collection Practices Act (FDCPA):

Let’s set the record straight: debt collectors are not allowed to harass or threaten people. The FDCPA makes it illegal for third-party collectors to use abusive, deceptive, or unfair practices when trying to collect a debt.

Many borrowers already carry a sense of guilt about their debt, which can make them more vulnerable to mistreatment. This guilt may cause them to tolerate behavior they shouldn’t. As counselors, we can help them recognize that no one deserves harassment, no matter their financial situation.

Some common FDCPA violations include contacting people at odd hours, using threatening language, or pretending to be law enforcement. Counselors can use checklists from the Office of Financial Readiness and the Volunteer Lawyers Network to help clients identify and report illegal collection behavior.

Equal Credit Opportunity Act (ECOA):

The ECOA makes it illegal to discriminate against someone applying for credit based on race, color, religion, sex, marital status, age, national origin, or receipt of public assistance. In theory, everyone should be judged based on their financial profile, not their personal identity.

But there are gray areas. For instance, lenders can ask about language preferences on applications—something that could be misused. Similarly, while creditors may inquire about financial obligations related to child dependents, they are not allowed to ask about a client’s intention to have children, their ability to bear children, or their use of birth control. (“V. Lending -Equal Credit Opportunity Act V-7.1 Equal Credit Opportunity Act (ECOA),” n.d.).

Counselors should advise clients to document any experiences that feel discriminatory. The FDIC offers detailed guidance on what’s allowed and what’s not under ECOA—a must-read for anyone working with underserved or vulnerable communities.

Credit CARD Act of 2009:

This law was a game-changer for credit card users. It limits when and how issuers can raise interest rates and requires that billing statements be easy to understand.

For new cardholders, issuers can’t hike up interest rates during the first year, unless the card has a variable rate, a promo rate expires, or the cardholder is more than 60 days late on a payment. These rules apply to existing balances too (Consumer Action Fact Sheet, n.d.).

Young adults under 21 face extra hurdles. They need proof of income or a co-signer who’s 21 or older. It’s critical both the applicant and co-signer understand how credit behavior affects them both. Counselors can use educational tools from Consumer-Action.org to help young clients build responsible credit habits.

Electronic Fund Transfer Act (EFTA):

The Electronic Fund Transfer Act (EFTA) protects consumers when they conduct electronic transfers of funds, such as ATM withdrawals, debit card payments, and online banking transactions. Any transfer initiated through an electronic terminal, telephone, computer, or magnetic tape falls under this protection. This includes person-to-person (P2P) payments made through platforms like Venmo or PayPal (Electronic Fund Transfers FAQs | Consumer Financial Protection Bureau, 2025).

 If something goes wrong—like a fraudulent charge or an unauthorized withdrawal—banks are required to investigate, not pass the buck to the merchant or app (Consumer Financial Protection Bureau, 2025). But there are deadlines. If a client reports an issue within two business days, their liability is capped at $50. Wait longer than that, and it could be up to $500. After 60 days, the client could be responsible for the full amount (1005.6 Liability of Consumer for Unauthorized Transfers, n.d.).

Regular account monitoring and prompt reporting are key. Make sure clients know how to spot suspicious activity and what steps to take if they find it.

Real Estate Settlement Procedures Act (RESPA):

RESPA is all about transparency in real estate deals. It requires lenders to clearly outline costs like title insurance, escrow fees, and closing costs. No more mystery fees at the signing table.

RESPA also bans “kickbacks,” where one professional (like a mortgage broker) pays another (like a real estate agent) for referrals. This helps keep client interests front and center (Consumer Financial Protection Bureau, 2024).

When clients ask for referrals—which they often do—encourage them to ask smart questions: “Do you receive compensation for referring me?” or “Are you affiliated with any financial institutions?” These questions can help them spot conflicts of interest before they sign on the dotted line.

References:

AnnualCreditReport.com. (2019). Home page. https://www.annualcreditreport.com/index.action

Consumer Action. (n.d.). Consumer Action fact sheet. https://www.consumer-action.org/downloads/alerts/CC_law.pdf

Consumer Financial Protection Bureau. (2024, March 15). Real Estate Settlement Procedures Act FAQs. https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/real-estate-settlement-procedures-act/real-estate-settlement-procedures-act-faqs/#respa-section-8-general

Consumer Financial Protection Bureau. (2024, December 12). CFPB closes overdraft loophole to save Americans billions in fees. https://www.consumerfinance.gov/about-us/newsroom/cfpb-closes-overdraft-loophole-to-save-americans-billions-in-fees/

Consumer Financial Protection Bureau. (2025, January 15). Electronic fund transfers FAQs. https://www.consumerfinance.gov/compliance/compliance-resources/deposit-accounts-resources/electronic-fund-transfers/electronic-fund-transfers-faqs/

Consumer Financial Protection Bureau. (2025, April 25). Providing equal credit opportunities (ECOA). https://www.consumerfinance.gov/compliance/compliance-resources/other-applicable-requirements/equal-credit-opportunity-act/

Consumer Financial Protection Bureau. (n.d.). 1005.6 Liability of consumer for unauthorized transfers. https://www.consumerfinance.gov/rules-policy/regulations/1005/6/

Federal Deposit Insurance Corporation. (n.d.). V. Lending – Equal Credit Opportunity Act V-7.1. https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/documents/5/v-7-1.pdf

Federal Trade Commission. (2013, July 19). Fair Credit Reporting Act. https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act

Federal Trade Commission. (n.d.). A summary of your rights under the Fair Credit Reporting Act. https://www.consumer.ftc.gov/sites/default/files/articles/pdf/pdf-0096-fair-credit-reporting-act.pdf

Office of Financial Readiness. (n.d.). Fair Debt Collection Practices Act: Consumer protection for borrowing money overview – What does the FDCPA do? https://finred.usalearning.gov/assets/downloads/FINRED-FDCPA-FS.pdf

Office of Financial Readiness. (n.d.). Truth in Lending Act: Consumer protection for borrowing money overview – What does the TILA do? https://finred.usalearning.gov/assets/downloads/FINRED-TruthLendingAct-FS.pdf

Office of the Comptroller of the Currency. (2019). Truth in lending | OCC. https://www.occ.treas.gov/topics/consumers-and-communities/consumer-protection/truth-in-lending/index-truth-in-lending.html

Truth in Lending. (2009, August 14). Federal Register. https://www.federalregister.gov/documents/2009/08/14/E9-18548/truth-in-lending