The U.S. Federal Reserve proposed two rules that would raise consumer protection coverage limits for credit transactions and leases.The proposed rules would increase the limits to $50,000, according to a Fed statement Monday. Amounts will be adjusted annually to reflect any increase in the consumer price index, the Fed said. Consumer loans of more than $25,000 are generally exempt from the protections of the Truth in Lending Act and leases where the consumer’s total obligation exceeds $25,000 are also exempt from safeguards of the Consumer Leasing Act. The Truth in Lending Act requires creditors to disclose important terms of consumer loans and prohibits creditors from engaging in certain practices. The Consumer Leasing Act requires lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases, such as automobile leases. The financial overhaul bill enacted July 21 included a provision to extend coverage to $50,000 effective July 21, 2011.
Bloomberg
