The Truth in Lending Act is a federal law designed to ensure that credit terms are disclosed to consumers so that they can compare terms and shop wisely for credit. The provisions of the Act, along with the Federal Reserve Board's Regulation Z, apply to persons and entities that offer or extend consumer credit, with some exceptions.

Major Provisions of the Act

Under the Act:

(1) a creditor must disclose certain information in writing before extending credit to a consumer;

(2) a person or entity that advertises consumer credit must disclose certain information in the ad;

(3) a consumer who uses his home as collateral for certain types of loans has a right to rescind the loan contract within a specified period of time;

(4) a creditor may not issue unsolicited credit cards to consumers; and

(5) a consumer is not liable for more than $ 50 for the unauthorized use of a credit card.

Enforcement of the Act

The Act is enforced by nine federal government agencies, as follows:

(1) the Federal Trade Commission enforces the Act against retailers, finance companies, creditors, and lessors that are not under the jurisdiction of another federal agency;

(2) the Comptroller of the Currency enforces the Act against national banks;

(3) the Federal Reserve Board enforces the Act against state member banks of the Federal Reserve System;

(4) the Federal Deposit Insurance Corporation (FDIC) enforces the Act against FDIC-insured banks that are not members of the Federal Reserve System;

(5) The Office of Thrift Supervision enforces the Act against insured savings institutions and members of the Office of Thrift Supervision System not insured by the FDIC;

(6) the Department of Transportation enforces the Act against air carriers;

(7) the National Credit Union Administration enforces the Act against federal credit unions;

(8) the Farm Credit Administration enforces the Act against federal land banks, federal land bank associations, federal intermediate credit banks, and production credit associations; and

(9) the Department of Agriculture enforces the Act against packers and stockyards.

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