What Is the Uniform Consumer Credit Code (UCCC)?

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DEFINITION
The Uniform Consumer Credit Code (UCCC) is guidance for state legislation that governs how creditors treat consumers.

The Uniform Consumer Credit Code (UCCC) is guidance for state legislation that governs how creditors treat consumers. Its goal is to protect consumers by reducing misinformation and predatory lending, among other practices.

Learn more about how it can protect consumers with their credit transactions. Also find out how the UCCC applies to many types of consumer credit, from personal loans to credit cards, and which states have adopted it into law.

Definition and Example of Uniform Consumer Credit Code

The Uniform Consumer Credit Code is a code of conduct meant to protect consumers from fraud or misinformation. Adopted as state laws, the UCCC sets limits on rates and charges, and requires the disclosure of the cost of credit. It also requires creditors to provide remedy options for consumers who are in default.

  • Acronyms: UCCC, U3C

The UCCC was developed by the National Conference of Commissioners on Uniform State Laws, or the Uniform Law Commission. It was created in 1968 and revised in 1974. It aims to remedy problems and concerns related to consumer credit in the United States, focusing on making credit available to consumers, but not predatory or exploitative. The code itself is not a federal or state law, but states can use it as a model to create their own laws on consumer credit that are consistent with other state laws.

The UCCC has provisions related to several types of consumer credit, including personal loans, automobile loans, credit cards, payday loans, and other forms of credit.

The UCCC has been adopted in 11 states: Colorado, Idaho, Indiana, Iowa, Kansas, Maine, Oklahoma, Utah, South Carolina, Wisconsin, and Wyoming. Other states may have consumer credit legislation that is similar to the UCCC.

State UCCC laws regulate terms and conditions of consumer credit, such as requiring disclosures, providing remedies for consumers in default, and setting maximum limits on rates and charges.

How Does the Uniform Consumer Credit Code Work?

The UCCC is a model statue established by the Uniform Law Commission, which creates potential legislation to propose to the states. States can choose whether to adopt these codes as regulation, and if they do, the regulation is uniform where it applies.

The UCCC covers several practices related to consumer credit. They include addressing usury, or lending at overly-high interest rates, promoting free competition in the lending markets, and defining and limiting predatory lending practices.

The UCCC was revised in 1974 to address new needs for poverty-level consumers who were seeking lending. It included new guidance on nationwide credit cards, which, at the time, were newly popular payment options.

The UCCC hasn’t been adopted by all states in the U.S., but some legislation at the national level has extended similar credit protections. National regulation includes the Equal Credit Opportunity Act, the Fair Debt Collection Practices Act, and the Truth in Lending Act.

What Is the Uniform Law Commission?

The Uniform Law Commission, also known as the National Conference of Commissioners on Uniform State Laws, has created more than 300 uniform laws and model acts.

While many of those acts and laws aren’t adopted in every state, some of their successful pushes for uniform law influence financial transactions. For example, its codes include acts related to how trade secrets are used and protected; how electronic signatures and records are handled legally; and how nonprofits and universities can invest funds.

Key Takeaways

  • The Uniform Consumer Credit Code is a code of conduct for creditors that aims to protect consumers.
  • The UCCC has been adopted by 11 states as regulation for consumer products such as credit cards, personal loans, and auto loans.
  • The topics the UCCC addresses include limits on rates and charges, disclosure requirements, and remedy options for consumers in default.

Article Sources

  1. National Conference of Commissioners on Uniform State Laws. “Uniform Consumer Credit Code.” Accessed Feb. 11, 2022.

  2. Colorado Attorney General. “Colorado Uniform Consumer Credit Code.” Accessed Feb. 11. 2022.

  3. Uniform Law Commission: “Consumer Credit Code.” Accessed Feb. 11, 2022.

  4. U.S. Securities and Exchange Commission. “Code of Federal Regulations.” Accessed Feb. 11, 2022.

  5. Uniform Law Commission. “Acts Overview.” Accessed Feb. 11, 2022.