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.