Truth in Lending Act (TILA)
15 U.S.C. § 1601 et seq. | Regulation Z (12 C.F.R. Part 1026) | Enacted 1968
Overview, What Is TILA?
The Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., was enacted in 1968 as part of the Consumer Credit Protection Act. It is implemented by the Federal Reserve's Regulation Z (12 C.F.R. Part 1026), now administered by the CFPB under the Dodd-Frank Act of 2010.
TILA's primary purpose is to promote the informed use of consumer credit by requiring meaningful disclosure of credit terms and costs. It gives consumers the right to cancel certain credit transactions, regulates practices, provides a means for the fair and accurate calculation of the annual percentage rate (APR), and sets liability for failure to disclose.
**Commercial Lending Exemption:** TILA generally does NOT apply to commercial or business-purpose loans. However, it DOES apply to loans secured by a dwelling (residential real estate), even if used for business purposes. This creates overlap in mixed-use lending situations.