What is the Truth in Lending Act?

The Truth in Lending Act (TILA) is a federal consumer protection law that was passed in 1968. It protects consumers from unfair credit practices by requiring lenders to clearly and accurately disclose key loan terms. For example, lenders must disclose the terms of a loan, including the annual percentage rate (APR), interest rate, finance charges, payment schedule, and other costs associated with the loan. TILA also provides consumers with the right to cancel certain credit transactions without penalty, such as a loan, within three days of signing. TILA applies to consumer credit transactions in Delaware, such as residential mortgages, home equity loans, reverse mortgages, auto loans, and credit cards. For residential mortgages, some of the additional disclosures required by TILA include the number of payments, the amount of each payment, the total of payments, the total sale price of the property, the annual percentage rate, and any balloon payments. In Delaware, consumer credit companies are also subject to the Delaware Consumer Loan Act, which provides additional consumer protections. For example, it limits the interest rate and fees that credit companies can charge consumer borrowers. It also requires that credit companies inform borrowers of their options for dispute resolution, and credit companies must offer borrowers the option of pre-payment without penalty. Overall, TILA is an important federal law in Delaware that helps protect consumers from unfair credit practices. It requires lenders to provide clear and accurate disclosures of loan terms, as well as other consumer protections such as the right to cancel certain credit transactions without penalty. This helps ensure that consumer borrowers are fully informed when taking out a loan or applying for a credit card.

Related FAQs

What is a loan originator?
What is the Garnishment Bank Act?
What is the federal Consumer Financial Protection Bureau?
What are the regulations surrounding banking?
What is the difference between a credit union and a bank?
What is the Federal Banking Agency Regulatory Relief Act?
What is the purpose of the Uniform Commercial Code?
What is the Alternative Mortgage Transaction Parity Act?
What is the Electronic Funds Transfer Act?
What are the requirements for a valid loan agreement?

What is the Truth in Lending Act?

Related FAQs

Related Blog Posts