Does TILA apply to me?

I recently took a phone call from a client that was in a slight panic over some recent “legal advice” they received at a training they attended.  The speaker, who happens to be an attorney, told the audience all of them are covered by TILA and Regulation Z, and must use the federal disclosure forms in all their dealings with their patients (yep – this was a health care providers meeting!).  This information caused quite a commotion, as all the managers for these doctor offices and medical practices had no idea how they were going to implement such a policy.

I am not a lawyer, and don’t play one on TV, so any advice I give is not “legal advice”. But I have read TILA and also monitor creditor and collection case law through various sources on a national basis, and I have not seen this application anywhere else.

Here is what TILA actually says in regards to who it applies to:

Under TILA, the term creditor refers to a person who both, “(1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement.”

If your business doesn’t do BOTH of these things, then TILA is not for you.  Do you “extend” credit to people?  Let me ask this; is your office policy “Payment at time of services rendered’?  Then you are not loaning people money.  There is a difference between a “credit transaction” as defined by the FACTAct of 2004 and reiterated by the 9th Circuit Court under the two Pintos cases, and the “extension of credit”.  As soon as you offer and or take payments, you have a credit transaction, but that does not mean you are in the business of regularly extending credit.

If you are concerned over your policies about TILA and it’s impact, I recommend you seek advice from an attorney well-qualified to speak about TILA, Regulation Z, and their application to businesses who take payments but do not offer the extension of credit.

For more information from the Federal Trade Commission about their opinion on TILA, you can go to: 

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