The Truth In Lending Act (TILA) protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans. For loans covered under TILA, you have a right of rescission, which allows you three days to reconsider your decision and back out of the loan process without losing any money. This right helps protect you against high-pressure sales tactics used by unscrupulous lenders. But TILA does not tell banks how much interest they may charge or whether they must grant a consumer loan.
TILA is located in the United States Code, beginning at 15 U.S.C. §1601. And the applicable regulations are located in the Code of Federal Regulations, beginning at 12 CFR § 226.1.
Congress enacted TILA to promote the "informed use of credit" by consumers. 15 U.S.C. § 1601(a). In doing so, Congress sought to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices. 15 U.S.C. § 1601(a). Though the TILA does not explicitly state that a cardholder can bring a suit claiming a violation of 15 U.S.C. § 1643, the majority of courts faced with such a claim have assumed the existence of a cardholder claim under section 1643.
A claim under section1643 is subject to a one-year statute of limitations. 15 U.S.C. § 1640(e) ("Any action under this section may be brought . . . within one year from the date of the occurrence of the violation.").
In Texas, as in all states, the Truth In Lending Act (TILA) provides consumers with protection against inaccurate and unfair credit billing and credit card practices. It mandates that lenders disclose loan cost information, enabling consumers to compare different loan options. TILA also includes a right of rescission, giving borrowers three days to cancel a loan agreement without penalty, which is particularly useful in guarding against aggressive sales tactics by lenders. However, TILA does not regulate interest rates or loan approvals. The Act is codified at 15 U.S.C. § 1601, with regulations at 12 CFR § 226.1, aiming to ensure consumers are well-informed about credit terms to prevent uninformed credit use and to safeguard against unfair practices. While TILA itself does not explicitly provide for a cardholder to sue for violations under 15 U.S.C. § 1643, courts have generally recognized the right to bring such claims, which must be filed within one year of the violation as per 15 U.S.C. § 1640(e).
