For how long must lenders retain records of compliance with TILA?

Lenders are required to retain records of compliance with the Truth in Lending Act (TILA) for at least two years. This retention period is essential for ensuring accountability and facilitating the examination of compliance with the law. The TILA aims to promote informed consumer decisions about credit by requiring clear disclosure of key terms and costs of lending. Retaining these records for two years allows regulatory agencies to verify that lenders are providing the necessary disclosures and adhering to the rules outlined in TILA.

By having this retention period, it serves as a protection for consumers, ensuring that any discrepancies or violations can be addressed within a reasonable time frame. Other potential retention periods mentioned, such as one year, three years, or five years, do not align with the specific requirements set forth by TILA and would not adequately capture the necessary compliance records for the mandated period. Thus, the requirement for a minimum of two years is vital for regulatory oversight and consumer protection.