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Truth In Lending Act The Truth
In Lending Act (TILA - Reg "Z") was first signed in 1968 by
President Johnson. Johnson passed the act with intentions of protecting
and educating the consumer in the field of purchasing credit. It was thought
that the information that was supplied to a consumer when purchasing credit
was not thorough enough for consumers to establish whether they were receiving
a good deal or not. Johnson ideally wanted the consumer to be able to
buy credit the same way as a consumer might purchase any other product.
This Act and its companion Regulation Z, which are the Act's rules and
regulations, attempt to give the everyday consumer the opportunity and
right to shop for credit in a fair and decent manner. In an effort to protect and educate consumers, sellers of credit are mandated to disclose certain information when offering credit. By disclosing such information, consumers are given the opportunity to shop around and find which rates are the best for them. Not only, but quite obviously, it lets consumers know exactly what they are getting into when accepting such credit. The consumer is now given the opportunity to know any interest rates, finance charges and fees straight from the beginning when applying for credit. This act, however, only applies to consumer credit. It is important to know that many exemptions do apply to the Truth In Lending Act and Regulation Z. If a credit purchase is not used primarily for personal consumer use such as business or agricultural, then it may be deemed exempt under this title. |
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