The Official Staff Commentary to Regulation Z clarifies how creditors that use a single document for the credit contract and Truth in Lending Act (TILA) disclosures may satisfy the requirement that disclosures be provided to the consumer prior to consummation of a loan in a form the consumer may keep.
The practice of putting TILA disclosures on the same document with a credit contract is common in connection with motor vehicle installment sales. Several court decisions have addressed whether creditors that use a single document must provide consumers with a separate copy of the disclosures to keep, before providing a second copy that the consumer may execute to become obligated on the credit contract. Due to lack of uniformity in these court decisions, the Official Staff Commentary clarifies that creditors are not required to give the consumer two separate copies of the document before consummation, one for the consumer to keep and a second copy for the consumer to execute. Rather, the disclosure requirement is satisfied if the creditor gives a copy of the document containing the unexecuted credit contract and disclosures to the consumer to read and sign; and the consumer receives a copy to keep at the time the consumer becomes obligated.
NOTE: It is not sufficient for the creditor merely to show the consumer the document containing the disclosures before the consumer signs and becomes obligated. The consumer must be free to take possession and review the document in its entirety before signing.
Example: A creditor gives a consumer a multiple-copy form containing a credit agreement and TILA disclosures. The consumer reviews and signs the form and returns it to the creditor, who separates the copies and gives one copy to the consumer to keep. The creditor has satisfied the disclosure requirement.