The term "Truth in Lending" is derived from the federal Truth in Lending Act, see 15 USC Section 1601 et seq (the "TILA"). The TILA protects consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement, including the following:

• Finance charges
• Annual percentage rate
• Amount financed
• Total payments
• Total sale price, including any down payment and all periodic payments

There are two key provisions of the TILA: Regulation Z and Regulation M.

Regulation Z: Regulation Z applies to individuals and businesses that offer or extend consumer credit on a regular basis, provided that the credit is subject to a finance charge or must be paid in more than four installments according to a written agreement, and the credit is primarily for personal, family, or household purposes. If Regulation Z applies to a transaction, the lender must clearly disclose various terms of the transaction.

Regulation M: Regulation M applies to consumer leasing transactions, provided the lease is for the use of personal property primarily for personal, family or household purposes, the lease period is in excess of 4 months, and the total obligation does not exceed $25,000.