Truth in Lending Act

Nickname(s)	Consumer Credit Protection Act
Enacted by the	90th United States Congress
Effective	May 29, 1968
Citations
Public Law	90-321
Stat.	82 U.S. Stat. 146
H.R. 11601
Title(s) amended	15 U.S.C. 1601: Commerce and Trade
Legislative history
Introduced in the Senate as S. 5 by William Proxmire (D–WI) on January 11, 1967 Committee consideration by: Senate Banking Committee, House Committee on Banking and Currency Passed the House on February 1, 1968 (383-4) Passed the Senate on July 11, 1967 (92-0) with amendment House agreed to Senate amendment on May 22, 1968 (agreed) with further amendment Senate agreed to House amendment on May 22, 1968 (agreed) Signed into law by President Lyndon B. Johnson on May 29, 1968
Codification
v t e

The Truth in Lending Act (TILA) of 1968 is United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.^[1]

TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. With the exception of certain high-cost mortgage loans, TILA does not regulate the charges that may be imposed for consumer credit. Rather, it requires uniform or standardized disclosure of costs and charges so that consumers can shop. It also imposes limitations on home equity plans that are subject to the requirements of Sec. 226.5b and certain higher-cost mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer's principal dwelling.

History [edit]

The Truth in Lending Act was originally Title I of the Consumer Credit Protection Act, Pub.L. 90–321, 82 Stat. 146, enacted June 29, 1968. The regulations implementing the statute, which are known as "Regulation Z", are codified at 12 CFR Part 226. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA usually refers to the requirements contained in Regulation Z, as well as the statute itself.

From TILA's inception, the authority to implement the statute by issuing regulations was given to the Federal Reserve Board. However, on July 21, 2011, TILA's general rule making authority was transferred to the Consumer Financial Protection Bureau, which was established on that date pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act which was enacted in July 2010. The Federal Reserve will retain some limited rule making authority under TILA for loans made by certain motor vehicle dealers, and for certain other provisions.

Organization [edit]

The regulation is divided into subparts.

Subpart B relates to open-end credit lines (revolving credit accounts), which includes credit card accounts and home-equity lines of credit (HELOCs).

Subpart C relates to closed-end credit, such as home-purchase loans and motor vehicle loans with a fixed loan term. It contains rules on disclosures, treatment of credit balances, annual percentage rate calculations, right of rescission,non requirements, and advertising.

Subpart D contains rules on oral disclosures, Spanish language disclosure in Puerto Rico, record retention, effect on state laws, state exemptions (which only apply to states that had Truth in Lending-type laws prior to the Federal Act), and rate limitations.

Subpart E contains special rules for mortgage transactions. Section 226.32 requires certain disclosures and provides limitations for loans that have rates and fees above specified amounts. Section 226.33 requires disclosures, including the total annual loan cost rate, for reverse mortgage transactions.^[2] Section 226.34 prohibits specific acts and practices in connection with mortgage transactions.

Several appendices contain information such as the procedures for determinations about state laws, state exemptions and issuance of staff interpretations, special rules for certain kinds of credit plans, a list of enforcement agencies, model disclosures which if used properly will ensure compliance with the Act, and the rules for computing annual percentage rates in closed-end credit transactions and total annual loan cost rates for reverse mortgage transactions.

See also [edit]

• Truth in Savings Act

References [edit]

Further reading [edit]

This article includes a list of references, but its sources remain unclear because it has insufficient inline citations. Please help to improve this article by introducing more precise citations. (April 2009)

• United States Code (2004). 15 USC 1601 et seq..
• FDIC, Truth in Lending Act
• Truth in Lending Handbook, Office of Comptroller of the Currency, Administrator of National Banks, December 2006.
• Truth in Lending Act Legislative History Law Librarian's Society of D.C.

v t e Bank regulation in the United States Fair debt collection Federal authorities Federal Financial Institutions Examination Council Financial Stability Oversight Council Federal Deposit Insurance Corporation Federal Reserve Board National Credit Union Administration Office of the Comptroller of the Currency Office of Thrift Supervision Consumer Financial Protection Bureau Major federal legislation Category Credit CARD Act of 2009 Emergency Economic Stabilization Act of 2008 Fair and Accurate Credit Transactions Act Gramm–Leach–Bliley Act Truth in Savings Act Electronic Fund Transfer Act Community Reinvestment Act Home Mortgage Disclosure Act Fair Credit Reporting Act Truth in Lending Act Bank Secrecy Act Bank Holding Company Act Federal Credit Union Act Glass–Steagall Act Federal Reserve Act Federal Reserve Board regulations Extensions of Credit by Federal Reserve Banks (Reg A) Equal Credit Opportunity (Reg B) Home Mortgage Disclosure (Reg C) Reserve Requirements for Depository Institutions (Reg D) Electronic Fund Transfer (Reg E) Limitations on Interbank Liabilities (Reg F) International Banking Operations (Reg K) Consumer Leasing (Reg M) Loans to Insiders (Reg O) Privacy of Consumer Financial Information (Reg P) Prohibition Against the Paying of Interest on Demand Deposits (Reg Q) Credit by Brokers and Dealers (Reg T) Credit by Banks and Persons Other Than Brokers or Dealers for the Purpose of Purchasing or Carrying Margin Stock (Reg U) Transactions Between Member Banks and Their Affiliates (Reg W) Borrowers of Securities Credit (Reg X) Truth in Lending (Reg Z) Unfair or Deceptive Acts or Practices (Reg AA) Community Reinvestment (Reg BB) Availability of Funds and Collection of Checks (Reg CC) Truth in Savings (Reg DD) Types of bank charter Credit union Federal savings bank Federal savings association National bank State authorities California Florida New York Oklahoma Pennsylvania Tennessee Terms Call report Thrift Financial Report CAMELS ratings CAMEL rating system Other topics History of central banking in the United States Wildcat banking