Consumer Credit Protection Act Of 1968

Definition of 'Consumer Credit Protection Act Of 1968'


Federal legislation that created disclosure requirements that must be followed by consumer lenders such as banks, credit card companies and auto-leasing firms. Pursuant to the act, consumer lenders were required to inform consumers about annual percentage rates (as opposed to the stand-alone interest rate), special or previously hidden loan terms and the total potential costs to the borrower.

Investopedia explains 'Consumer Credit Protection Act Of 1968'


The consumer credit protection act of 1968 was important in that it made the terms of loans more transparent to borrowers who may not be as well-versed in finance. For example, showing a borrower the annual percentage rate (APR) of interest will bring to light that if the loan stipulates a 10% interest rate (annual percentage yield (APY)) paid monthly, the borrower will actually be paying closer to 10.5% on the loan over the year.



comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center