Truth in Lending Act (TILA/Regulation Z)

The Truth in Lending Act, which became law in 1968, is contained in title IV of the Consumer Credit Protection Act. The purpose of this part is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. The regulation also includes substantive protections.


The law required the Federal Reserve Board (FRB) to adopt an implementing regulation. The Consumer Financial Protection Bureau (CFPB) inherited the regulation on July 21, 2011. Regulation Z is divided into the following subparts:

Subpart A General
Subpart B Open-end credit.
Subpart C Closed-end credit, including §1026.19.
Subpart D Miscellaneous
Subpart E Special rules for certain home mortgage transactions, including §1026.37 and 38.
Subpart F Special rules for private education loans
Subpart G Special rules applicable to credit card accounts and open-end credit offered to college students


In general, this part applies to financial institutions that offer or extend credit, when four conditions are met:

  • The credit is offered or extended to consumers;
  • The offering or extension of credit is done regularly;
  • The credit is subject to a finance charge or is payable by a written agreement in more than four installments; and
  • The credit is primarily for personal, family, or household purposes.


Areas of TILA/Regulation Z that commonly generate confusion and questions include:

  • TRID
  • Adjustable Rate Mortgage (ARM) rules
  • Ability-to-Repay (ATR) and Qualified Mortgages (QM)
  • Open-End Credit;
  • High Cost Mortgage Loans (HCML or HOEPA);
  • Higher Priced Mortgage Loans (HPML); and
  • Right of Rescission


For additional resources on the topic of TILA and Regulation Z visit the following pages: