Which of the following transactions are not covered under the TILA?

Which of the following transactions are not covered under the TILA?

• A. Personal and residential
• B. Business and commercial
• C. Business lending payable by a written agreement in more than four installments
• D. Residential and personal property

Answer: (B)

The main idea is that Truth in Lending Act (TILA) applies to consumer credit—loans used for personal, family, or household purposes. It does not cover loans made primarily for business or commercial use. So a transaction described as business lending is not subject to TILA disclosures, regardless of how many installments are agreed upon. Personal and residential loans, or loans secured by residential property used for personal purposes, are consumer transactions and are covered by TILA. Therefore, the option describing business or commercial lending is not covered under TILA.

The main idea is that Truth in Lending Act (TILA) applies to consumer credit—loans used for personal, family, or household purposes. It does not cover loans made primarily for business or commercial use. So a transaction described as business lending is not subject to TILA disclosures, regardless of how many installments are agreed upon. Personal and residential loans, or loans secured by residential property used for personal purposes, are consumer transactions and are covered by TILA. Therefore, the option describing business or commercial lending is not covered under TILA.