Truth in Lending, Consumer Leasing Acts Amended under Dodd-Frank
McLEAN, Va. — After the Dodd-Frank Wall Street Reform was passed, the Fed has been tasked with two rules expanding the coverage of Regulation Z, or Truth in Lending Act, and Regulation M, the Consumer Leasing Act, to credit transactions and leases of up to $50,000, according to NADA Regulatory Affairs.
Basically, TILA requires creditors to disclose key terms of consumer loans and prohibits creditors from engaging in certain practices.
"Currently, consumer loans of more than $25,000 are generally exempt from TILA," officials at the NADA Regulatory Affairs reported.
"The CLA requires lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases. An automobile lease is the most common type of consumer lease covered by CLA. Currently, a lease is exempt from the CLA if the consumer's total obligation exceeds $25,000," officials added.
However, they went on to add that effective July 21, 2011, the financial reform requires that the protections of TILA and CLA apply to consumer credit transactions and consumer leases at the higher $50,000 limits.
"This amount will be adjusted annually to reflect any increase in the consumer price index," the NADA Regulatory Affairs office concluded.