Regulation Z is a section of the extensive Truth in Lending Act (TILA) of 1968, which was enacted by Congress to protect consumers. The regulation implements TILA so lenders clearly and plainly explain borrowing terms, fees and interest rates to the public. Anyone who applies for a credit card, mortgage or another type of installment loan, like a car or private student loan, should be able to better understand the loan or credit product’s rules, thanks to Regulation Z. To help you understand your rights, we’re taking a closer look at Regulation Z and why it matters.

Regulation Z protects you

Regulation Z doesn’t guarantee that a lender will issue you a home loan or credit card, but it does ensure you are provided with all the information you need about how the loan or credit works.

The regulation protects you by making information about the product you’re considering readily available in the easiest to understand way possible. Knowledge is power — if you’re informed about how a credit card or loan works and what it will cost, you can make a better decision that’s less likely to negatively affect your finances in the long run.

Some of the topics the regulation covers include disclosures about credit cards and mortgages and the fees associated with each. Lenders must also simplify and streamline the disclosures, so they’re as brief as possible and easy to understand. In many cases, the disclosures are limited to a single sheet or just a few pages long. The regulation also covers private student loans, although most of the focus in on credit card and home lending products.

Key aspects to know about

Here is how Regulation Z applies to different types of credit products in more detail:

Credit Cards

Regulation Z covers quite a few aspects relating to credit cards. The CARD Act of 2009 was added to further limit the growing number of unfair credit card practices. Here are some of the most important protections:

  • Billing: Your card issuer must deliver your credit card statement at least 21 days before the payment is due.
  • Cost disclosures: A card issuer must provide a chart or list of all the costs associated with the card, including interest rates, late fees, annual fees, etc. You’ll find the pricing sheet on the card’s website, in your copy of the cardholder agreement, and you can also request one.
  • Fee limits: Regulation Z limits the amount of credit card fees an issuer can charge to a maximum of 25% of your credit limit.
  • Limited liability for unauthorized card transactions: If your card is used without permission, you are not responsible for more than $50 of the charge, and in many cases, none of it, as long as you report it promptly.
  • Payment disclosures: The card issuer must include an explanation of your payment options with every statement detailing how long it will take and how much it will cost you to only make the minimum monthly payment until the balance is paid off.
  • Payments must apply to the highest-interest debt: When you make a payment, the card issuer must pay off the most expensive portion of what’s due first. For example, a cash advance withdrawal comes with a higher interest rate than a regular store purchase. If you have a $100 cash advance balance and $150 in regular purchases and you make a $200 payment, your card issuer must apply the payment to the $100 cash advance first and use the remaining funds to pay the rest.


Home loans are tricky to understand. Regulation Z sets rules to make mortgages and home equity lines of credit fair transparent. The regulation steps in to regulate the home mortgage industry even more than the credit card industry. Protections include:

  • Loan disclosures: The number of fees that come with a loan can overwhelm a home buyer. Regulation Z requires the lending industry to simplify fees and requirements so consumers can better understand what a mortgage will cost them. Lenders must provide two documents. The first is a loan estimate that details the interest rate, loan amount, closing fees and monthly payment. The second is a Closing Disclosure that explains the loan terms and costs in more detail.
  • Steering not allowed: The practice of steering means a broker or originator pushes or “steers” you to go with the mortgage lender or type of loan product that will pay them the highest commission. Steering is forbidden because the broker may sell you on a loan that isn’t the best for you only to line their pockets.

What to do if your rights are violated

If your bank, card issuer or loan provider is not following the rules of Regulation Z and you feel that your rights have been violated, you should request to speak with a supervisor or manager about your problem. Be calm yet firm and remind them of your rights under the Truth in Lending Act and Regulation Z. If you can’t reach the appropriate supervisor, write a letter explaining the issue and how you would like the financial institution to resolve it. The government provides a template you can use to get started.

If the financial institution doesn’t take steps to resolve the issue, you can file a complaint with the appropriate regulatory government agency. For credit cards, home loans and personal loans, file a complaint with the Consumer Financial Protection Bureau (CFPB). If a mortgage provider has misled you or made deceptive or fraudulent claims, report them to the Federal Trade Commission and your state’s consumer protection office.