who bears the payment risk in a letter of credit
Letter of credit In the event that the buyer is unable to make payment on the purchase, the seller may make a demand for payment on the bank. The bank will examine the beneficiary's demand and if it complies with the terms of the letter of credit, will honor the demand.[4] Most letters of credit are governed by rules promulgated by the International Chamber of Commerce known as Uniform Customs and Practice for Documentary Credits.[5] The current version, UCP 600, became effective July 1, 2007. Banks will typically require collateral from the purchaser for issuing a letter of credit and will charge a fee which is often a percentage of the amount covered by the letter of credit.
Fair Credit Reporting Act The Fair Credit Reporting Act, 15 U.S.C. § 1681 (“FCRA”) is U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports. To that end, the FCRA regulates the collection, dissemination, and use of consumer information, including consumer credit information.[1] Together with the Fair Debt Collection Practices Act ("FDCPA"), the FCRA forms the foundation of consumer rights law in the United States. It was originally passed in 1970,[2] and is enforced by the US Federal Trade Commission, the Consumer Financial Protection Bureau and private litigants.