What does the Federal Truth in Lending Act regulate?

The Federal Truth in Lending Act (TILA) is primarily focused on ensuring transparency and fairness in lending practices, particularly in consumer credit transactions. The law requires lenders to disclose important terms and costs associated with a loan, which includes information about mortgage terms in their advertising. This is intended to help consumers understand the true cost of borrowing and to make informed decisions when selecting credit options.

By regulating advertising related to mortgage terms, TILA aims to prevent misleading claims and provide standardized information about interest rates, financing charges, and total costs. This ensures that consumers have access to clear and concise information that aids in comparing different loan offerings.

This focus on transparency in advertising distinguishes TILA from other aspects of lending, such as repayment schedules, personal credit assessments, or default and foreclosure procedures, which are covered under different regulations and consumer laws.