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There are many laws and regulations in place to make sure that banks and other financial institutions don't obtain unreasonable power over a person's finances. For instance, banking laws are in place to make sure that funds in saving accounts are protected. Regulations also prohibit lenders from lying about how much a debtor owes them or making unsubstantiated threats over the phone. Understanding these laws is important for individuals and businesses that may be victims of fraud.
There are two main financial protection agencies in the United States. The first is the Federal Deposit Insurance Corporation, which is notable for insuring up to $250,000 per account in any member institution. If bank accounts fall victim to theft or mismanagement, the FDIC can help come to the rescue.
The other main agency that enforces finance law is the Consumer Financial Protection Bureau. This bureau has jurisdiction over banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services and debt collectors.
Many cases revolve around lenders who try to scam customers or violate terms of the Fair Debt Collection Practices Act. Consumers could also report violators of the FDCPA to the Federal Trade Commission.
Specific types of banking law cases include charges of unfair lending practices, such as refusing to loan money to minorities. If a bank or another financial institution engages in fraudulent lending practices, a borrower may wish to take such a case to court.
A banking law attorney could gather evidence that a financial rule or regulation was violated. For instance, the FDIC provides a fact sheet that goes over the various ways in which lenders are expected to conduct themselves. This may be introduced during a settlement conference or trial to establish that a rule has been broken.
An attorney could also gather bank documents or other records that potentially show a lender engaging in illegal behavior. If necessary, an attorney can make a Freedom of Information Act request to obtain records from federal agencies. These documents may help prove that a violation took place.
While banking law can seem pretty esoteric to the average person, experienced attorneys have the background to help navigate the legal waters. Most big lenders and banks have their own legal teams. Therefore, a creditor will generally take a consumer more seriously if he or she has legal counsel. That may ultimately result in a larger settlement or jury award.
Furthermore, an attorney might be able to determine the true extent of any violations that occurred and what the associated penalties should be. In some cases, this can result in enough leverage to obtain a favorable settlement without the need to go to court.