The Truth in Lending Act requires lenders in the United States to disclose key credit terms consistently so consumers can compare borrowing costs. It was enacted in 1968 as part of the Consumer Credit Protection Act.
The law supports standardized disclosures for items such as finance charges, annual percentage rates, and payment schedules. By presenting costs in a more consistent format, it aims to reduce confusion among competing credit offers.
The Truth in Lending Act does not guarantee that a loan or credit card is inexpensive, nor does it set one universal interest rate. Other laws cover different issues, including credit-reporting accuracy, electronic fund transfers, and fair lending. Regulation Z implements many of the act’s disclosure requirements.