7 Financial Laws You May Not Know

There are different laws and regulations governing commercial banking, capital markets, insurances, and investment sectors. Various laws are put into place to keep people and businesses safe, some of which play an integral part in the formation of global economies and legal transactions. 

So, if you want to learn more about the repercussions and implications of some of these laws, here are 7 of them that you might not have heard of before.


Multiple IRAs

You probably thought you can only have one individual retirement account, but that’s not the case, thanks to this law. You are allowed to have more if you happen to already have a 401(k) plan, which is then rolled into a traditional IRA. Sometimes, people can even do this if they have an old Roth IRA from before. In most cases, people inherit one, even though they had one of their own. However, in all cases, your deposits are subject to the annual maximum limit of $6,000 and $7,000 for people over 50 years of age.


Suing your employer after injuries

Another thing that a lot of employees—especially those who were victims of a workplace accident—don’t know is that you can still sue your employer even after collecting the workers’ compensation benefits. This is why you need to read more about how a skillful attorney can notice that something was wrong with your case. With their help, you could get a better compensation deal. Many people don’t understand their rights, so it’s a good idea to hire an experienced professional to guide you through the process. The law states that if the accident happened because you were performing a task outside the scope of your job description, or if your employer acted with malicious intent, then you may still have the right to file another lawsuit.


Plausible deniability with insurances 

A lot of sectors in the world have different insurance plans, but sometimes, the people within the confines of a transaction or company do not realize that they are doing something illegal. This law states that if you’re dealing with money—whether in the commercial or banking sectors—and there have been some irregularities that you missed, you won’t necessarily be in trouble or taken to court because it would be considered unactionable. This means that you may not be subject to any legal liability.


Handling debt collectors

When you’re in a position where you have a debt to pay, some companies may not directly receive it or ask for it. Most companies just hire a third-party debt collector to do it. Sometimes, this can get messy or turn out to be a hassle. However, there are laws that allow you to send them a written cease and desist letter or sue them if they have been violating your rights in any way.


Liability insurance laws for indemnities

Indemnities are common in many different contracts, especially in the retail sector. People who create products or big brands that manufacture and sell them need a guarantee that they won’t go bankrupt if a product causes harm or gets recalled for any reason. This means that legal costs should be on the Indemnitor and not the indemnitee, making this point a must-have in any contract between the two parties, in case any problems arise.


Using your home equity for various payments

Not many people know this, but you’re allowed to refinance your home and take cash out of it whenever you want. This means that you’re giving away ownership to the creditors or insurance company, but you might find yourself paying a lot more than what the home is worth, even if the law permits it.


Overdraft protection laws

If you withdraw money from a bank and the remaining balance goes below zero, then this is considered an overdraft and causes a lot of problems. But luckily, you have laws that help you pay it off with funds through different courtesy pay programs. This includes electronic transfers, ATM withdrawals, debit card purchases, and checks.

It’s important to understand these laws ahead of time; you don’t want to get yourself in a tough situation that you can’t get out of smoothly. Of course, you should do your best not to violate any financial laws, but luckily, there are regulations that protect people who do that unknowingly. The system is designed to be fair, so as long as you make sure that every financial activity you carry out is within the confines of the law, you can rest assured that you’ll be safe. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.