How to Validate the APR for Truth in Lending

By Amir Dabiri - February 17, 2014

We have recently received calls from customers that during audits have been asked to validate the accuracy of the Truth in Lending Act (TILA or also known as regulation Z) computations. Many of them get overwhelmed when asked to do so. If you have worked with auditors, you know that it always come down to “prove it to me, you’re doing it right”. To make this task more daunting, TILA does not provide any validation tools. If you read the law, it provides examples but it leaves it to each individual to accomplish the computations. That leaves you in a predicament if you are not familiar with financial formulas. A good tool to use is APRWIN. This is free software from, The Office of the Comptroller of the Currency. It’s the tool of choice for federal auditors to utilize when conducting banking and financial audits to validate TILA computation.

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