What is the regulation AA’
Regulation AA was unfair or Deceptive acts and practices regulation is intended to solve the practice of banks, which were perceived as unfair consumers. Regulation AA established procedures used for processing complaints registered by Bank customers. These Rules apply only to state member banks. It was enacted in 1985 and repealed in 2016.
The penetration of regulation AA’
Regulation AA was created in response to numerous customer complaints that were not reviewed in the prescribed manner. Consumers who were dissatisfied with their Bank was directed to send them to the Director of the division of the community on the Board of governors in Washington, DC.
Practices prohibited by regulation AA
Two parts are included the regulation of AA. Subpart in the prescribed manner of the Federal reserve system for processing and responding to consumers complaining of unscrupulous and fraudulent banking practices. Subpart B prohibits the use of banks of certain practices used to ensure the fulfilment of loan obligations in their contracts. Types of provisions of a Treaty is prohibited under Subpart B included:
- Assignment of wages
- Confession, the court
- Security interests in household goods
- Waivers of benefits
Banks are also prohibited distortion of the degree and nature of liability of surety for a debt, and failing to notify the guarantor of that obligation before the occurrence of the debt. In addition, regulation AA to prohibit banks using additionally purchased for late payment.
Repeal of regulation AA
Dodd-Frank wall Street reform and the law On the protection of consumers, ended the power of the Federal reserve system, to make rules concerning deceptive or unfair banking practices, and therefore, regulation AA was repealed with the enactment of Dodd-Frank.
However, the Dodd-Frank transferred this rulemaking authority in the Bureau for financial consumer protection (cfpb). In bankruptcy issued Interagency guidance on unfair or unscrupulous lending practices that served “to clarify that the cancellation of the loan rule [as stated in the resolution AA] … should not be construed as a definition of agencies that the credit practices described in these former regulations [now] allowed.” As a result, any financial institution that participates in credit practices previously prohibited in accordance with Regulation AA may still be cited for violation of the law. Consumer complaints against such practices can still be enjoyed on site in the bankruptcy.