What does TILA stand for?

By Merritt Hardy - July 1, 2018

TILA (an acronym for Truth in Lending Act) is a United States federal law designed to promote the informed use of consumer credit by requiring disclosures about its terms and cost. It was originally known as Title I of the Consumer Credit Protection Act enacted May 29, 1968.  It was created to standardize the manner in which costs associated with borrowing are calculated and disclosed, therefore protecting consumers against inaccurate and unfair credit billing practices.


From TILA’s inception, the authority to implement the statute of issuing regulations was given to the Federal Reserve Board (FRB). However, effective July 21, 2011, TILA’s general rule making authority was transferred to the Consumer Financial Protection Bureau (CFPB), whose authority was established pursuant to provisions enacted by the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in July 2010.


The Truth in Lending Act introduced the Annual Percentage Rate (APR) calculation which was mandated for all consumer lenders. Retail installment sale contracts produced for financed automobile sales must disclose the calculated annual percentage rate, amount financed, total of payments, total down payment and the total sales price in the Truth in Lending section. The contract must also provide an itemization of the amount financed and late payment penalties.


A lender can be held accountable for erroneous truth in lending information however the lender has up to sixty days after the discovery to make the appropriate correction unless the borrower has already filed a lawsuit. If the error was completely unintentional, the lender may not be held responsible.  Unfortunately the lender, not the consumer, bears the weight of proving beyond a doubt that the violation was unintentional.


Deal Pack has done its research and is 100% compliant with the Truth in Lending Act as it relates to the automobile industry.  If you would like a Demo of our DMS, Service & Parts or our CycleCRM systems, please reach out to us at 1-800-526-5832 and one of our trained Account Specialist will be more than happy to assist you.

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