Truth in Lending Act

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Truth in Lending Act

The Truth in Lending Act is contained in Title I of the Consumer Credit Protection Act (15 U.S.C.A. § 1601 et seq.). The CCPA is designed to assure that every customer who needs Consumer Credit is given meaningful information concerning the cost of such credit. The Truth in Lending Act requires that the terms in transactions involving consumer credit be fully explained to the prospective debtors. It sets forth three basic rules: (1) a creditor cannot advertise a deal that ordinarily is not available to anyone except a preferred borrower; (2) advertisements must contain either all of the terms of a credit transaction or none of them; and (3) if the credit is to be repaid in more than four payments, the agreement must indicate, in clear and conspicuous print, that "the cost of credit is included in the price quoted for the goods and services." This law does not impose regulations upon the advertising media, only upon the prospective creditor.

Cross-references

Consumer Protection.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

Truth in Lending Act

n. a Federal statute which requires a commercial lender (bank, savings and loan, mortgage broker) to give a borrower exact information on interest rates and a three-day period in which the borrower may compare and consider competitive terms and cancel the loan agreement.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
It begins with an overview of mortgage lending and how the mortgage market works, then covers the license requirements in all 50 states; compensation and how originators make money in the mortgage market; federal regulations, including the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Real Estate Settlement and Procedures Act, and other regulations; the underwriting and approval guidelines for conforming loans; non-traditional and government loans; and general real estate purchase information.
LoanSifter, Appleton, Wisconsin, a complete product and real-time pricing platform, is now providing additional assurance for lenders to maintain compliance with federal Truth-in-Lending Act changes through an exclusive automated safe harbor disclosure document.
Here's one thing you can do to help: Representative John La Falce (Democrat of New York) has introduced a bill, HR 4410, that would make it a violation of the Truth-in-Lending Act for a credit card issuer to penalize a cardholder solely because he or she maintains a zero balance.