What does TILA stand for?

TILA stands for the Truth in Lending Act. This legislation, enacted in 1968, is designed to promote transparency in lending practices by requiring lenders to provide borrowers with essential information regarding the terms and costs of their loans. This includes critical details such as interest rates, total finance charges, and the annual percentage rate (APR), which enables consumers to make informed decisions about borrowing.

The focus of TILA is to protect consumers by ensuring they understand the credit terms offered to them and can compare different loan products. It mandates that lenders disclose this information clearly and understandably, aiding in reducing the risk of misleading lending practices. As a result, TILA plays a crucial role in fostering fair lending practices and preventing deceptive practices that could harm consumers.