Truth in Lending Act (TILA) examination procedures

Updated March 30, 2018

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The TILA and RESPA examination procedures have been updated to reflect amendments to Regulations X and Z. Specifically, the updates reflect the Amendments Relating to Small Creditors and Rural or Underserved Areas under TILA (Rural-Small Rule), the Amendments to the 2013 Mortgage Rules under RESPA (Regulation X) and TILA (Regulation Z) (the 2016 Servicing Rule) final rules, and the October 2017 Mortgage Servicing interim final rule. The updates also include corrections and clarifications to existing text.

Summary

The Truth in Lending Act (TILA) is intended to ensure that credit terms are disclosed in a meaningful way so consumers can compare credit terms more readily and knowledgeably. Before its enactment, consumers were faced with a bewildering array of credit terms and rates. It was difficult to compare loans because they were seldom presented in the same format. Now, all creditors must use the same credit terminology and expressions of rates.

 In addition to providing a uniform system for disclosures, the act:

  • Protects consumers against inaccurate and unfair credit billing and credit card practices
  • Provides consumers with rescission rights
  • Provides for rate caps on certain dwelling-secured loans
  • Imposes limitations on home equity lines of credit and certain closed-end home mortgages
  • Provides minimum standards for most dwelling-secured loans
  • Delineates and prohibits unfair or deceptive mortgage lending practices

The TILA and Regulation Z do not, however, tell financial institutions how much interest they may charge or whether they must grant a consumer a loan.