What are the penalties for violating the Truth in Lending Act (TILA)?

Under the Truth in Lending Act (TILA), the penalties for violations include actual damages incurred by the borrower as a result of the violation, as well as the possibility of statutory damages that can be awarded in cases where a lender is found at fault. Statutory damages can cover specific amounts established by law, often to encourage compliance and deter further violations. Additionally, the lender may be responsible for the borrower’s attorney's fees, enabling them to recover legal costs associated with pursuing the violation.

This multifaceted penalty structure reflects the Act's intention to protect consumers by making sure they are not only compensated for actual losses but also to hold lenders accountable for non-compliance, which could lead to widespread abuses in lending practices. The combination of these penalties serves to reinforce the importance of transparency in lending and the obligation of lenders to provide clear, accurate information regarding credit terms.