The federal Truth in Lending Act ("TILA"), and the Federal Reserve Board's Regulation Z implementing TILA, are applicable to most employee benefit plans that have plan loan provisions, such as a "typical" 401(k) plan or 403(b) plan. This is because Regulation Z covers any entity or individual that offers credit under the following conditions: (1) the credit is offered or extended to a "consumer"; (2) the credit is primarily for personal, family, or household purposes; (3) the credit carries a finance charge, or is payable in more than four installments, pursuant to the terms of a written agreement; and (4) the entity or individual makes more than 25 loans – including both new loans and refinancing of old loans – during the year, or made more than 25 such loans during the preceding year. The first three conditions will always be met by a plan loan program, so it becomes a question of whether the plan makes, or has made, more than 25 loans per year.
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