On May 29, 1968, the Truth in Lending Act (TILA) was signed into law. The act was one of the very first designed to protect consumers involved in credit transactions. It required lenders to disclose all terms and conditions of charges on extensions of credit. The act standardized credit terms such as the annual percentage rate (APR), loan terms and all fees associated with the loan.
Congress believed that by promoting intelligent use of credit, it would ultimately lead to increased economic stability and competition among financial institutions.
Fast forward five decades and you can see that the government is still working to protect consumers in credit transactions. In 2009, President Obama signed into law a bill that that introduced significant measures deemed necessary to protect consumers from credit card companies.
The most salient concepts of Obama's bill were:
1) Prohibition of credit cards for consumers under 21 unless they met certain stringent criteria.
2) Restriction of rate increases until 60 days have passed since the customer's missed payment.
3) Requirement of 45 days notice for interest rate increases.
Learn more about consumer protection in our article, The History Of Consumer Credit Rights.