What type of credit transactions does TILA primarily apply to?

The Truth in Lending Act (TILA) primarily applies to residential mortgages, focusing on consumer protection in credit transactions. TILA's main goal is to promote informed use of consumer credit by requiring disclosures about its terms and costs, which is particularly important in the context of residential mortgages as they involve significant financial commitments and have long-term impacts on borrowers.

This act requires lenders to provide clear and comprehensive information about the credit being extended, including interest rates, terms, and total costs, which helps consumers make informed decisions when borrowing for housing. While TILA also provides regulations that can extend to credit card accounts and other consumer credit products, its primary emphasis is indeed on residential mortgages, where the need for transparency and consumer protections is paramount.

Commercial loans, while they may have some regulatory oversight, are generally not covered under TILA since the act specifically targets consumer credit rather than business-related lending. Similarly, student loans have distinct regulations under different laws, such as the Higher Education Act, largely separate from TILA's scope.