What can happen to a lender who violates TILA?

A lender who violates the Truth in Lending Act (TILA) can incur actual damages plus statutory damages. This is significant because TILA is designed to promote transparency and fairness in lending by requiring lenders to disclose the terms and costs associated with loans. If a lender fails to comply with these requirements, consumers can be harmed financially due to misleading or insufficient information.

Actual damages refer to the real financial loss suffered by the borrower as a direct result of the lender's violation. Statutory damages are predetermined amounts specified by law, which serve as penalties beyond the borrower’s specific losses. Together, these types of damages can incentivize compliance with TILA, protecting consumers from dishonest lending practices and ensuring that they have all necessary information to make informed decisions about borrowing.

This consequence acts as a deterrent for lenders and emphasizes the importance of adhering to lending regulations, thus maintaining the integrity of the mortgage industry.