Q: What is the purpose of Truth

in Lending Act (TILA)?

A: To protect persons from a
lack of awareness of the true
cost of credit and to prevent
the uninformed use of credit.
 Q: When does TILA apply?
A: It applies to creditors who extend loans, sales on
installments and other credit transactions.
Q: What are the items required to be disclosed?

A:
1. In credit sales:
a. Cash price or delivered price;
b. Credit for downpayment or tradein;
c. Total amount to be financed;
d. Charges not incident to the sale;
e. Finance charges amounts to be paid by the debtor
incident to the extension of credit such as interests,
discounts, collection fees, credit investigation fees and
attorneys fees;
f. Percentage of the finance charges or the amount to be
financed;
g. Effective interest rate;
h. Repayment program; and
i. Default or delinquency charges or late payments. (Sec. 4,
TILA)
 2. In consumer loans:
a. Amount of credit;
b. Charges;
c. Amount to be financed;
d. Amount of finance charge;
e. Effective interest rates;
f. Percentage of finance charge and amount
to be financed;
g. Default or delinquency charges; and
h. Description of security.
 Q:
When and how should disclosure be
made?

A:Prior to the consummation of the

transaction and in a clear statement in
writing.
 Q: What are the credit transactions covered by TILA?

A:
Loans, mortgages, deeds of trust, advances and discounts;
Conditional sales contracts, any contract to sell, or sale or
contract of sale of property or services, either for present or
future delivery, under which part or all of the price is payable
subsequent to the making of such sale or contract;
Any rentalpurchase contract;
Any contract for the hire, bailment or leasing of property;
Any option, demand, lien, pledge or other claim against, or for
delivery of, property or money;
Any purchase, or other acquisition of, or any credit upon the
security of, any obligation or claim arising out of any of the
foregoing; and
Any transaction or series of transactions having a similar purpose
or effect. (Sec. 3
 Q:What transactions are not covered by
TILA?

A:
Those which do not involve the payment of
any finance charges by the debtor; and
Where the debtor is the one specifying a
definite and fixed set of credit terms such as
bank deposits, insurance contracts, sale of
bonds, etc.

Failure to disclose to any person any
information in violation of TILA or any
regulation issued.
(Sec. 6 [a])
Charges not itemized cannot be collected. If
already paid, can be recovered. Liable in the
amount of P 100 or in an amount equal to
twice the finance charged required by such
creditor, whichever is the greater, however,
such liability shall not
Q: When must an action for
violation of the Truth in Lending
Act be brought?
A: Within 1 year from the date of
the occurrence of the violation