Truth in Lending Act

The Truth in Lending Act was originally Title I of the Consumer Credit Protection Act, . 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. TILA introduced the annual percentage rate (APR) calculation that consumer lenders must disclose. In the auto market, manufacturers and their captive finance companies have long used promotional financing offers, such as 0 percent APR loans or cash rebates, which interact with TILA's definitions of "finance charge" and "amount financed." The choice between a low promotional rate and a cash rebate changes the total cost of credit and depends on vehicle price, rebate size, and term. ==Organization==

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). Prior to revisions finalized in 2001, the language provision referenced Spanish language disclosures in Puerto Rico; the rule now permits disclosures in any language if English versions are available on request, except for advertisements. Subpart E contains special rules for mortgage transactions. • § 1026.35 establishes requirements for "higher-priced" mortgage loans (HPMLs). • § 1026.40 sets the requirements for home equity plans. 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 that, 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. ==Right of rescission==

For certain transactions secured by a borrower's principal dwelling, TILA grants a three-business-day right of rescission following loan consummation. The rescission period runs from the last of three events, consummation of the transaction, delivery of all material disclosures, or delivery of the required rescission notice. Each consumer with an ownership interest in the property may exercise the right to rescind until midnight of the third business day after the triggering event. The right of rescission does not apply to loans used to purchase or construct the consumer's principal dwelling, nor does it apply to a refinancing or consolidation with the same creditor of a loan already secured by the consumer's principal dwelling, except to the extent that new funds beyond the existing balance are advanced. ==Exemptions==

TILA requirements do not apply to the following types of loans or credit: • Credit extended primarily for business, agricultural, or commercial purposes. • Credit extended to an entity rather than a natural person, with limited exceptions for certain trusts. • Credit in excess of an annually adjusted threshold, not secured by real estate or by personal property used or expected to be used as a principal dwelling. The Bureau and the Board publish the updated dollar-amount threshold each year. ==See also==