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Truth In Lending Act
This essay is published for informational purposes only. It is not legal advice, nor is it intended as a substitute for the advice of your attorney.
The Truth In Lending Act (TILA - Regulation "Z") was signed into law in 1968. The goal of the TILA involves protecting consumers and educating consumers about purchasing on credit. When this Act was signed into law, it was thought that the information that was supplied to a consumer when purchasing on credit was not thorough enough for consumers to establish whether they were receiving a good deal or not.
The TILA was designed to provide additional information so consumers could make better informed decisions about their use of credit. It is designed to protect consumers against inaccurate and unfair credit billing. The Truth in Lending Act requires creditors to make meaningful disclosure about credit terms. This law, and its companion Regulation Z attempted to give consumers the opportunity and the right to shop around for the best deal when dealing with creditors. Another goal was to help consumers understand their obligations as well as the rights and obligations of lenders.
In an effort to protect and educate consumers, sellers of credit are required to disclose certain information when offering to sell consumer products on credit. By disclosing such information, consumers are given the opportunity to shop around and find which rates and which programs are the best for them. This legislation lets consumers know exactly what they are getting into when applying for credit. The consumer is now given the told the interest rates, finance charges when applying for credit.
This federal law applies to consumer credit. It is important to know that many exemptions apply to the Truth In Lending Act and Regulation Z. For example, if a credit purchase is not used primarily for personal consumer use such as business or agricultural, then it may be exempt from some or all of the provisions of the Truth in Lending Act.
Here is a link to the full text: http://law.cornell.edu/uscode/15/usc_sup_01_15_10_41_20_I_30_A.html
Edited by Michael C. Dennis. Mr Dennis is a consultant and he can be reached with questions, comments or inquiries at mcdennis13@yahoo.com