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    REPUBLIC ACT 3765 "Truth in Lending Act" Purpose

    Uploaded by

    Karl Luzung
    The Truth in Lending Act requires full disclosure of the true cost of credit to protect consumers. It covers creditors engaged in extending credit and requires disclosure of the cash price, down payment, amount financed, finance charges in pesos and centavos, and annual percentage rate prior to consummating transactions. Violations result in penalties including fines and liability for twice the finance charge or P2,000, whichever is greater. The law covers various credit transactions but excludes those without finance charges or where the debtor specifies terms.

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    REPUBLIC ACT 3765 "Truth in Lending Act" Purpose

    Uploaded by

    Karl Luzung
    2K views1 page
    The Truth in Lending Act requires full disclosure of the true cost of credit to protect consumers. It covers creditors engaged in extending credit and requires disclosure of the cash price, down payment, amount financed, finance charges in pesos and centavos, and annual percentage rate prior to consummating transactions. Violations result in penalties including fines and liability for twice the finance charge or P2,000, whichever is greater. The law covers various credit transactions but excludes those without finance charges or where the debtor specifies terms.

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    Truth-in-Lending-Act

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    The Truth in Lending Act requires full disclosure of the true cost of credit to protect consumers. It covers creditors engaged in extending credit and requires disclosure of the cash price, down payment, amount financed, finance charges in pesos and centavos, and annual percentage rate prior to consummating transactions. Violations result in penalties including fines and liability for twice the finance charge or P2,000, whichever is greater. The law covers various credit transactions but excludes those without finance charges or where the debtor specifies terms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views1 page

    REPUBLIC ACT 3765 "Truth in Lending Act" Purpose

    Uploaded by

    Karl Luzung
    The Truth in Lending Act requires full disclosure of the true cost of credit to protect consumers. It covers creditors engaged in extending credit and requires disclosure of the cash price, down payment, amount financed, finance charges in pesos and centavos, and annual percentage rate prior to consummating transactions. Violations result in penalties including fines and liability for twice the finance charge or P2,000, whichever is greater. The law covers various credit transactions but excludes those without finance charges or where the debtor specifies terms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    REPUBLIC ACT 3765 “Truth in Lending Act”

    Purpose
    1. To protect citizens from lack of awareness of the true cost of credit to the user by:
     Assuring full disclosure of such cost
     Preventing uninformed use of credit to the detriment of national economy
    2. Disclosure of finance charges in connection with extension of credit
    Who are covered?
    Creditor- person engaged in business of extending credit who requires an incident to extension of
    credit, the payment of finance charge.
    Obligations of Creditors
    1. Cash price/Delivered price
    2. Downpayment
    3. Difference between cash price/delivered price and the downpayment
    4. Charges paid and to be paid
    5. Total amount to be financed
    6. Finance charge in pesos and centavos
    7. Annual rate on outstanding unpaid balance of the obligation
    How the information be furnished?

    - Must be disclosed to the debtor prior to the consummation of transaction


    - Must be clearly stated in writing

    Effect on obligation in case of violations

    - Contract and transactions remains valid or enforceable

    Penalties

    1. Any creditor who violates the law is liable in the amount of P100 or in an amount equal to twice the
    finance charged required by such creditor in connection with such transaction, whichever is the greater,
    except that such liability shall not exceed P2,000 on any credit transaction. The action must be brought
    within one year from the date of the occurrence of the violation.
    2. The creditor is also liable for reasonable attorney’s fees and court costs as determined by the court.
    3. Any person who willfully violates any provision of this law or any regulation issued thereunder shall be
    fined by not less than P1,00 or more than P5,000 or imprisonment of not less than 6 months, nor more
    than one year or both.

    Covered Transactions
    1. Loan, mortgage, deed of trust, advance and discount
    2. Any conditional sales contract
    3. Rental-purchase contract
    4. Contract or arrangement for the hire, bailment, or leasing of property.
    5. Option, demand, lien, pledge, or other claim against or for delivery or, property or money
    6. Purchase, or other acquisitions of, or any credit upon security of any obligation or claim arising out
    of any of the foregoing
    7. Any transactions having similar purpose or effect.
    Excluded Transactions
    1. Credit transactions which do not involve the payment of any finance charge by the debtor
    2. Credit transactions in which the debtor is the one specifying a definite and fixed set of credit terms
    such as bank, insurance contracts, sale of bonds, etc.

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