Enacted in 1968 and modified in 1980, the federal Truth in Lending Act requires the clear disclosure of all important terms and costs in lending agreements. Also called Regulation Z, the law is designed to protect consumers in transactions that involve credit. The Truth in Lending Law should enable consumers to compare loans and shop for the best terms. This disclosure can include whether or not there's a penalty for early loan repayment. However, the law's critics contend that a mismatch between the required disclosures and the information that the consumer needs to compare loans prevents this outcome.
