Final answer:
The question relates to the Fair Credit Reporting Act, which obliges entities to inform individuals of the credit reporting agency involved when adverse action is taken and allows for corrections to credit file errors. Other related laws include the Equal Credit Opportunity Act, which prohibits discrimination in credit decisions, and the Financial Services Modernization Act, which requires financial institutions to maintain consumer privacy.
Step-by-step explanation:
The subject of the question pertains to a federal law that seeks to protect consumers when their credit information is involved, particularly when taking adverse action based on credit reports. This law is the Fair Credit Reporting Act (FCRA) of 1970, which compels those who use credit reporting agency information for adverse actions to disclose the source of the report to the potential borrower. Furthermore, the FCRA provides consumers with the right to have inaccuracies in their credit files corrected.
In alignment with consumer protection, other laws such as the Equal Credit Opportunity Act prevent discrimination based on gender, race, ethnicity, and sometimes age in credit decision-making. The practices outlawed include refusing to loan money to married women independently of their husbands and considering only the husband's income for family credit. Additionally, the Financial Services Modernization Act of 1999 reinforces privacy by requiring financial institutions to provide privacy policies and protect customer information.
All these regulations emphasize consumer rights and protections within the financial sector. It is crucial to provide only the minimum information requested by any source, understand why the information is being collected, how it will be used, and who will have access to it, as well as to monitor your credit history regularly for signs of identity theft or fraud.