What is the purpose of the Truth in Lending Act?

The purpose of TILA is to promote the informed use of consumer credit, by requiring disclosures concerning its conditions, cost to standardize the way in which expenses associated with borrowing are considered and disclosed. TILA also gives consumers the permission to terminate specific credit transactions that entail a lien on a consumer's main home, regulates certain credit card practices, and provides a method for reasonable and timely resolution of credit billing disputes. With the exclusion of specific high-cost mortgage loans, TILA does not regulate the charges that could be imposed for consumer credit. To be more precise, it requires regular or standardized disclosure of expenses and charges so that consumers can shop. It furthermore imposes restrictions on home equity plans that are subject to the requirements of Sec. 226.5b and some higher-cost mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in correlation with credit secured by a consumer's principal dwelling.

What is the Truth in Lending Act?

The Truth in Lending Act (TILA) of 1968 is a United States federal law intended to guard consumers in credit dealings, by requiring clear revelation of key terms of the lending procedure and all costs. The statute is contained in Title I of the Consumer Credit Protection Act, as amended (15 U.S.C. § 1601 et seq.). The rules implementing the statute, which are identified as "Regulation Z", are codified at 12 CFR Part 226. The majority of the detailed requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA typically refers to the requirements contained in Regulation Z, as well as the statute itself.