What is the main purpose of the Truth in Lending Act (TILA), enacted in 1968?
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To prevent lenders from changing loan terms or fees at the last minute for profit and protect consumers from unfair credit practices.
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Which loans and lenders does TILA (Regulation Z) apply to?
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It applies to all regular credit extenders, including banks, credit unions, finance companies, credit card companies, and mortgage lenders, mainly for owner-occupied 1-4 family residential units. Exceptions include investor financing, commercial loans, seller financing, unchanged loan assumptions, and loans with ≤4 installments.
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Why does TILA emphasize disclosing the TRUE annual percentage rate (APR)?
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To provide a standardized system for loan costs, including all fees, so consumers can easily compare different lending options.
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What are "trigger terms" in TILA advertising, and what must be disclosed if used?
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Trigger terms include down payment, payment amount, payment period, finance charges, or "interest-free" claims. Advertisements must disclose all terms: APR, finance charges, number of payments, due dates, late fees, prepayment penalties, and total finance charges.
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Answer DELETE "NEXT CARD" on the bottm right from the last flashcard
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Transcript
What is the main purpose of the Truth in Lending Act (TILA), enacted in 1968?
Flip flashcard to reveal answer
The correct answer is...
To prevent lenders from changing loan terms or fees at the last minute for profit and protect consumers from unfair credit practices.
Back to Question
Next card
Which loans and lenders does TILA (Regulation Z) apply to?
Flip flashcard to reveal answer
Previous card
The correct answer is...
It applies to all regular credit extenders, including banks, credit unions, finance companies, credit card companies, and mortgage lenders, mainly for owner-occupied 1-4 family residential units. Exceptions include investor financing, commercial loans, seller financing, unchanged loan assumptions, and loans with ≤4 installments.
Next card
Back to Question
Why does TILA emphasize disclosing the TRUE annual percentage rate (APR)?
Flip flashcard to reveal answer
Previous card
The correct answer is...
To provide a standardized system for loan costs, including all fees, so consumers can easily compare different lending options.
Next card
Next card
Back to Question
What are "trigger terms" in TILA advertising, and what must be disclosed if used?
Flip flashcard to reveal answer
Previous card
The correct answer is...
Trigger terms include down payment, payment amount, payment period, finance charges, or "interest-free" claims. Advertisements must disclose all terms: APR, finance charges, number of payments, due dates, late fees, prepayment penalties, and total finance charges.
Next card
Back to Question
question
Flip flashcard to reveal answer
Previous card
The correct answer is...
Answer
Next card
Back to Question
question
Flip flashcard to reveal answer
Previous card
The correct answer is...
Answer DELETE "NEXT CARD" on the bottm right from the last flashcard
Back to Question