Truth in Lending Act abbreviated as TILA, referred to Regulation Z is a federal law protecting people from unfair and predatory lending practices. TILA requiring that a lender disclose the terms of a mortgage (including the annual percentage rate APR and other charges) in writing.
TILA is designed to protect consumers and ensure clear disclosure of the key terms of the loan, as well as any costs or fees involved. The act also requires the right of rescission period for certain types of loans.
TILA or Regulation Z's goals include:
- Promote the informed use of consumer credit by requiring disclosures about its terms and cost.
- To ensure that consumers are provided with greater and more timely information on the nature and costs of the residential real estate settlement process
- To effect certain changes in the settlement process for residential real estate that will result in more effective advance disclosure to home buyers and sellers of settlement costs.
To learn more, visit 12 CFR Part 1026 – Truth in Lending (Regulation Z).