Consumer Credit Protection Act (CCPA)
Definition - What does Consumer Credit Protection Act (CCPA) mean?
The Consumer Credit Protection Act is a law that was put into effect in 1968 as a protection for consumers who use credit. The law made it mandatory for creditors to completely disclose the terms and conditions of credit agreements, regulated the use of charge accounts, and limited the garnishing of wages.
Justipedia explains Consumer Credit Protection Act (CCPA)
Essentially, this law was put into place to prevent people from being taken advantage of by credit companies. Before this law was put into place, there was no limit to how much credit companies could garnish wages from debtors who defaulted on their payments. However, because of the CCPA, credit companies can only garnish up to 25% of disposable income earnings from people who owe them money. This limitation prevents debtors from having all of their money taken by creditors immediately if they default on a payment.