What is the Truth in Lending Act (TILA) and what does it require?

The Truth in Lending Act, or TILA, is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate, or APR, total interest cost, payment schedule, and total amount financed. TILA gives borrowers the right to cancel certain mortgage transactions within three business days, known as the right of rescission, which applies to refinances and home equity loans but not to purchase mortgages on a primary residence.