TILA (Truth in Lending Act)

The Truth in Lending Act, or TILA, is a 1968 federal consumer protection law, codified at 15 U.S.C. 1601 and following and implemented by Regulation Z. Its purpose is the "informed use of credit": lenders must give standardized disclosures, including the annual percentage rate (APR), finance charge, amount financed, and total of payments, so borrowers can compare loans and credit cards. TILA also covers credit card billing rights, certain mortgage protections, and the right to cancel some home-secured loans within three days.

TILA gives borrowers a right to sue. In an individual case, a borrower can recover actual damages plus statutory damages, which are generally twice the finance charge, with set minimums and maximums for some kinds of credit. In a closed-end loan secured by real property or a dwelling, individual statutory damages are not less than $400 or more than $4,000.

Class actions are allowed but capped. Under 15 U.S.C. 1640, total statutory damages in a TILA class action cannot exceed the lesser of $1,000,000 or 1% of the creditor's net worth. Successful plaintiffs can also recover attorney's fees.

Timing matters: most TILA damages claims must be filed within one year of the violation, though some mortgage claims have longer periods. Keep loan documents, disclosures, and statements. See our page on Wells Fargo lawsuits and our FCRA explainer for a related credit law.