law

Truth in Lending Act

The Truth in Lending Act (TILA) is a federal consumer protection law that requires lenders to disclose the true cost of credit, including the annual percentage rate and finance charges, so borrowers can compare loans. It is implemented by Regulation Z. TILA also regulates credit advertising: if an ad mentions certain trigger terms, such as a down payment amount or monthly payment, it must include full disclosures. It gives a right of rescission for some refinance loans.

Exam tip: TILA equals Regulation Z equals APR disclosure and advertising trigger terms. A general phrase like "easy financing" is not a trigger term.
Example: An ad saying "only $1,200 per month" contains a trigger term, so it must also state the APR, down payment, and repayment terms.

1. Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

Answer & explanation

Answer: A. Specific terms like the down payment amount, number or amount of payments, finance charge or repayment period trigger full disclosure (including APR). General statements do not.

Related terms & state variants

annual percentage rate Regulation Z RESPA TRID

Sources

Source verification pending. Confirm current requirements with your state regulator.

Last verified: 2026-10-23