PRBC believes that good customers should get the credit they deserve. Respect is a central tenet of the PRBC concept. When you become a PRBC MainStreet business, you're telling customers that you’ve made a commitment to them in exchange for their doing business with you.
We ask all PRBC MainStreet businesses to adhere to our Code of Ethics. That means:
- Complying with all applicable U.S. State and Federal laws and regulations relating to responsible lending.
- Taking the time to honestly and clearly inform and educate borrowers about your credit policies and practices.
- Providing quality customer service aimed at creating a satisfied, repeat customer who derives real quality and value for their money.
When businesses and customers are honest, upfront, straight-forward and respectful, transactions happen and relationships are built. Ultimately this is better for both the business and the customer and that’s what PRBC is all about.
Laws, Regulations and Practices for PRBC businesses.
- Truth in Lending Act (TILA)
This law requires lenders to disclose loan terms and APRs. This law also requires lenders to provide advertising disclosures, credit payments properly and provide periodic statements. Promotes the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer’s principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. With the exception of certain high-cost mortgage loans, TILA does not regulate the charges that may be imposed for consumer credit. Rather, it requires uniform or standardized disclosure of costs and charges so that consumers can shop. It also imposes limitations on home equity plans that are subject to the requirements of Sec. 226.5b and certain higher-cost mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer’s principal dwelling. All participating lenders are required to abide by the terms of the Truth in Lending Act.
- Electronic Fund Transfer Act/Regulation
This law protects consumers engaging in electronic fund transfers. Among other things, Regulation E Prohibits lenders from requiring, as a condition of loan approval, a Customer’s authorization for loan repayment through an electronic funds transfer except in limited circumstances.
- Equal Credit Opportunity Act (ECOA)
I. This law sets forth requirements for accepting applications and providing notice of any adverse action and it prohibits discrimination against any borrower with respect to any aspect of a credit transaction on a prohibited basis. When You Apply For Credit, Creditors May Not…
- Discourage you from applying or reject your application because of your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
- Consider your race, sex, or national origin, although you may be asked to disclose this information if you want to. It helps federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to stay in the country long enough to repay the debt.
- Impose different terms or conditions, like a higher interest rate or higher fees, on a loan based on your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.
- Ask if you’re widowed or divorced. A creditor may use only the terms: married, unmarried, or separated.
- Ask about your marital status if you’re applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in “community property” states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A creditor in any state may ask for this information if you apply for a joint account or one secured by property.
- Ask for information about your spouse, except:
- if your spouse is applying with you;
- if your spouse will be allowed to use the account;
- if you are relying on your spouse’s income or on alimony or child support income from a former spouse;
- if you live in a community property state.
- Ask about your plans for having or raising children, but they can ask questions about expenses related to your dependents.
- Ask if you get alimony, child support, or separate maintenance payments, unless they tell you first that you don’t have to provide this information if you aren’t relying on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.
II. When Deciding To Grant You Credit Or When Setting The Terms Of Credit, Creditors May Not…
- Consider your race, color, religion, national origin, sex, marital status or whether you get public assistance.
- Consider your age, unless:
- you’re too young to sign contracts, generally under 18;
- you’re at least 62, and the creditor will favor you because of your age;
- it’s used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you’re about to retire;
- it’s used in a valid credit scoring system that favors applicants 62 and older. A credit scoring system assigns points to answers you give on credit applications. For example, your length of employment might be scored differently depending on your age.
- Consider whether you have a telephone account in your name. A creditor may consider whether you have a phone.
- Consider the racial composition of the neighborhood where you want to buy, refinance or improve a house with money you are borrowing.
III. When Evaluating Your Income, Creditors May Not…
- Refuse to consider reliable public assistance income the same way as other income.
- Discount income because of your sex or marital status. For example, a creditor cannot count a man’s salary at 100 percent and a woman’s at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children.
- Discount or refuse to consider income because it comes from part-time employment, Social Security, pensions, or annuities.
- Refuse to consider reliable alimony, child support, or separate maintenance payments. A creditor may ask you for proof that you receive this income consistently.
IV. You Also Have The Right To…
- Have credit in your birth name (Mary Smith), your first and your spouse’s last name (Mary Jones), or your first name and a combined last name (Mary Smith Jones).
- Get credit without a cosigner, if you meet the creditor’s standards.
- Have a cosigner other than your spouse, if one is necessary.
- Keep your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor has evidence that you’re not willing or able to pay.
- Know whether your application was accepted or rejected within 30 days of filing a complete application.
- Know why your application was rejected. The creditor must tell you the specific reason for the rejection or that you are entitled to learn the reason if you ask within 60 days. An acceptable reason might be: “your income was too low” or “you haven’t been employed long enough.” An unacceptable reason might be “you didn’t meet our minimum standards.” That information isn’t specific enough.
- Learn the specific reason you were offered less favorable terms than you applied for, but only if you reject these terms. For example, if the lender offers you a smaller loan or a higher interest rate, and you don’t accept the offer, you have the right to know why those terms were offered.
- Find out why your account was closed or why the terms of the account were made less favorable, unless the account was inactive or you failed to make payments as agreed.
- Fair Credit Reporting Act (FCRA)
This law requests that furnishers of information to consumer reporting agencies ensure the accuracy of data placed in the consumer reporting system. This law also prohibits the use of consumer reports for impermissible purposes and requires users of consumer reports to provide certain disclosures.
Regulates the collection, dissemination, and use of consumer information, including consumer credit information. CRAs are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, including employment. Credit bureaus, a type of consumer reporting agency, hold a consumer’s credit report in their databases. CRAs have a number of responsibilities under FCRA, including the following:
- Provide a consumer with information about him or her in the agency’s files and to take steps to verify the accuracy of information disputed by a consumer. Under the Fair and Accurate Credit Transactions Act (FACTA), an amendment to the FCRA passed in 2003, consumers are able to receive one free credit report a year. The free report can be requested by telephone, mail, or through the government-authorized website, annualcreditreport.com
- If negative information is removed as a result of a consumer’s dispute, it may not be reinserted without notifying the consumer within five days, in writing.
- CRAs may not retain negative information for an excessive period. The FCRA describes how long negative information, such as late payments, bankruptcies, tax liens or judgments may stay on a consumer’s credit report — typically seven years from the date of the delinquency. The exceptions: bankruptcies (10 years) and tax liens (seven years from the time they are paid).
- The three big CRAs — Experian, TransUnion, and Equifax — do not interact with information furnishers directly as a result of consumer disputes. They use a system called E-Oscar. In some areas of the country, however, there are other credit bureaus. For example, in Texas, if a consumer tries to dispute information with Equifax directly, they must go through CSC Credit Services which is linked to the Equifax database.
- Fair Debt Collection Practices Act
This law governs collection activities conducted by: (i) third party collection agencies collecting on behalf of lenders; (ii) lenders collecting their own debts suing an assumed name; and (iii) any collection agency that acquires the debt if the collector acquired the debt when it already was in default.
purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information’s accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act.
The Act prohibits certain types of “abusive and deceptive” conduct when attempting to collect debts, including the following:
- Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
- Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted
- Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number
- Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
- Contacting consumer known to be represented by an attorney
- Communicating with consumer after request for validation has been made: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer’s written request for verification of a debt made within the 30 day validation period (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor’s name and address.
- Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer.
- Publishing the consumer’s name or address on a “bad debt” list
- Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law
- Threatening arrest or legal action that is either not permitted or not actually contemplated
- Abusive or profane language used in the course of communication related to the debt
- Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer’s spouse or attorney). (Collection agencies are allowed to contact neighbors or co-workers but only to obtain location information; disreputable agencies often harass debtors with a “block party” or “office party” where they contact multiple neighbors or co-workers telling them they need to reach the debtor on an urgent matter.
- Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.
- Reporting false information on a consumer’s credit report or threatening to do so in the process of collection.
The Act requires debt collectors to do the following (among other requirements):
- Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to effect collection of the debt.
- Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer’s written request made within 30 days of receipt of the §1692g notice;
- Notify the consumer of their right to dispute the debt (Section 805), in part or in full, with the debt collector. The 30-day “§1692g” notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of “initial communication” was amended to exclude “a formal pleading in a civil action” for purposes of triggering the §1692g notice, complicating the matter where the debt collector is an attorney or law firm. The consumer’s receipt of this notice starts the clock running on the 30-day right to demand verification of the debt from the debt collector.
- Provide verification of the debt. If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g notice, then the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Consumers may still dispute a debt verbally or after the thirty-day period has elapsed, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor.
- File a lawsuit in a proper venue If a debt collector chooses to file a lawsuit, it may only be in a place where the consumer lives or signed the contract. Note, however, that this does not prevent the debt collector from being sued in other venues for violating the Act, such as when the consumer moves outside the venue and a letter demanding payment is forwarded to the new address, even if the debt collector is unaware of such a change in residence.
- Telephone Consumer Protection Act
This law, along with Federal Communications Commission’s implementing rules, regulates the actions of telemarketers and collection agencies.
- Telemarketing Sales Rule
These rules, enforced by the Federal Trade Commission, govern outbound and certain inbound telemarketing activities.
- Section 5 of the Federal Trade Commission Act / UDAAP
Section 5 of the Federal Trade Commission Act generally prohibits unfair or deceptive marketing practices. UDAAP refers to acts or practices that are unfair, deceptive, or abusive.
Deceptive. An act or practice is deceptive when:
- The representation, omission, act or practice misleads or is likely to mislead the consumer; Deceptive. An act or practice is deceptive when:
- The representation, omission, act or practice misleads or is likely to mislead the consumer; 26
- The consumer’s interpretation of the representation, omission, act or practice is reasonable under the circumstances; and
- The misleading representation, omission, act or practice is material. Unfair.
An act or practice is unfair when:
- causes or is likely to cause substantial injury to consumers;
- The injury is not reasonably avoidable by consumers; and
- The injury is not outweighed by countervailing benefits to consumers or to competition.
Abusive. An act or practice is abusive when:
- It materially interferes with the ability of a consumer to understand a term or condition of a financial product or service; or
- Take unreasonable advantage of: (a) a lack of understanding on the part of the consumer of the material risks, costs or condition of the product or service; (b) the inability of the consumer to protect its interests in selecting or using a consumer financial product or service; or (c) the reasonable reliance by the consumer on the lender to act in the interest of the consumer.
- PRBC MainStreet businesses commit to the following industry Best Practices
- Ensure Consumers are making educated financial decisions by fully disclosing all Loan terms in a transparent and easy to understand way.
- Give Consumers a chance to change their mind by maintaining a reasonable cancellation policy.
- Be a company in good standing with the officials and regulatory bodies that govern you. Comply with all applicable laws and regulations.
- Never engage in activities that are unfair, abusive or deceptive.
- Help Consumers help themselves by providing referrals to credit counseling, education and assistance when appropriate.
- Use advertising and marketing practices that promote the responsible use of short-term credit services. Do not engage in any false, misleading or deceptive advertising campaigns.
- Take applications from Consumers and originate Loans consistent with all applicable laws.
- Ensure that payments are authorized and processed consistent with federal laws and that Consumers fully understand the options for sustained use of Loans.
- Provide comprehensive website security and fraud prevention practices that include timely and accurate reports on loan activity, consumer notification of account use, and validation of routing numbers.
- Always treat consumers with respect and use fair, professional and non-abusive collection practices. Never use unlawful threats, intimidation, or harassment to collect accounts.
- Appropriately manage third-party service providers to ensure that consumer information is shared and protected consistent with applicable law.
Consult with your legal counsel for other laws and regulations that affect your business.
PRBC is committed to providing people who are experiencing credit problems access to credit counseling information. For a list of approved credit counseling services in your area visit www.justice.gov.