Truth in Lending

Overview

The materials on this page are intended to provide useful guidance on Truth in Lending Act requirements. The Truth in Lending Act ("TILA") is intended to ensure that credit terms are disclosed in a meaningful way so that consumers can compare credit terms more readily and knowledgeably. Before its enactment in 1968, consumers were faced with a bewildering array of credit terms and rates.

In addition to providing a uniform system for disclosures of credit terms, TILA:

  • provides consumers with rescission rights;
  • provides for rate caps on certain dwelling-secured loans (although it generally does not dictate interest rate charges);
  • imposes limitations on home equity lines of credit and certain closed-end home mortgages;
  • provides minimum standards for most housing loans; and
  • delineates and prohibits unfair or deceptive mortgage lending practices.

TILA is also the basis for consumer credit protections with regard to consumer leasing transactions and credit card practices.

Historically, the authority for adopting rules under TILA belonged to the Federal Reserve Board. However, Dodd-Frank transferred that authority to the Consumer Financial Protection Bureau ("CFPB"). The principal regulations adopted under TILA are known as "Regulation Z," whether of the Federal Reserve Board or of the CFPB.

Scott.Cammarn@cwt.com's picture
Contributor Organization 
Contributor Title 
Partner, Banking
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Contributor Organization 
Contributor Title 
Partner, Banking

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Statutes

TILA Regulations

Dodd-Frank Provisions