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February 15, 2009

Truth-in-Lending Act

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Definition

Also known as Regulation Z, is a regulation that applies to qualified plans that regularly extends qualified plan loans  more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year.

The Truth-in-Lending Act requires the participant to be provided with information that includes , the terms of the loan such as rate of interest, repayment period and finance charges;  so that the participant will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.

Referring Cite

12 CFR 226; 15 U.S.C. §1601 et seq

Additional Helpful Information

For this purpose, Dwelling means a residential structure that contains 1 to 4 units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home.

The Truth-in-Lending Act also applies to consumer credit that is not qualified plan loans

 

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