Introduction
The Truth in Lending Act (TILA), implemented in Regulation Z, requires a number of notices and disclosures to be sent to borrowers that generally include important account information. LoanPro has created a breakdown of all the required TILA disclosures, along with some helpful features that can automate notice and disclosure processes for easy compliance.
Required TILA Disclosures
Open-End Credit
- Account-opening disclosures that include information such as APR, account-opening and other imposed fees, finance charge, grace periods, computation methods, and available credit, among other items.
- A periodic statement should be sent including information such as: previous balance, transaction identification, existing credits, periodic rates, finance and other charges, finance charge balance, billing error notice, and closing and due dates.
- An annual statement of billing rights, which may be included with the periodic statement as an alternative summary statement if desired.
- Supplemental credit access devices and additional feature disclosures, which are only required if such access devices (such as checks) or additional features are added to an account after the account-opening disclosures have been given.
- Check access disclosures, which are required if checks that can be used to access a credit account are delivered 30 or more days after the account-opening disclosures have been given.
- Change in terms notices are required when a significant change is made to the terms included in the account-opening disclosures, and should be sent at least 45 days prior to the effective date of the change.
- A renewal disclosure is required if a credit account charges an annual or other periodic renewal fee, and should be delivered at least 30 days (or one billing cycle) before the fee comes due. This disclosure may be made on or with the periodic statement.
- Insurance provider change notices are required if a card issuer plans to change the insurance provider for a credit card account at least 30 days before the change takes effect, and it should include information about any rate increases, decreases in coverage, and a discontinuation statement.
- A rate increase notice should be sent if there will be an increase in the interest rate due to default or penalty 45 days before the effective date of the increase.
Closed-End Credit
- Account-opening disclosures containing all terms of the loan, including the amount financed, finance and other charges, APR, total payments, and more should be given prior to the consummation of a new loan. New disclosures should be given in the event of refinancing.
LoanPro Solutions
LoanPro’s Communication Suite offers the prebuilt notices and disclosure forms that follow safe harbor templates, making it easy to add compliant notices to your operations. Prebuilt templates are customizable, and new templates can be created, as needed to ensure you meet all compliance requirements.
The sending of notices is fully automated. Notices can be sent electronically or via standard mail. Triggers that determine when notices are sent are also customizable to ensure that lenders and program managers stay compliant.
