Federal Financial Regulations D, Z, and E

REGULATION Z
The Truth in Lending Act (TILA, also called Regulation Z) of 1968 with modification over the years is a United States federal law designed to protect consumers in credit transactions, by requiring clear disclosure of key terms of the lending arrangement and all costs.

The purpose of TILA is to promote the informed use of consumer credit, by requiring disclosures about its terms, cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer’s principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes.

The lender must disclose to the borrower the annual percentage rate (APR). The APR reflects the cost of the credit to the consumer. It may contain things other than interest such as origination fees and discount points. The Truth-in-Lending Act defines “finance charge” as all fees paid either directly or indirectly by the person to whom the credit is extended, incident to the extension of the credit. For more details click here.

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REGULATION D (DD)
The Truth in Savings Act (TISA, also known as Regulation D or DD) is a United States federal law that was passed on December 19, 1991. It established uniformity in the disclosure of terms and conditions regarding interest, dividends and fees when giving out information on or opening a new savings account.

The Truth in Savings Act requires the clear and uniform disclosure of rates of dividends and interest (annual percentage yield or APY) and the fees that are associated with the account so that the consumer is able to make a meaningful comparison between potential accounts. For example, a customer opening a certificate share account must be provided with information about ladder (tiered) rates (smaller interest rates with smaller deposits) and penalty fees for early withdrawal of a portion or all of the funds.

The Act is only applicable to deposit accounts that are held by a “natural person” for personal, household, or family use. Accounts owned by businesses or non-profit organizations are not subject to these rules. For more details click here.

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REGULATION E
See Electronic Funds Transfer (EFT) on the bottom of the homepage.

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