Rep. John J. LaFalce of New York introduced legislation last week that would expand consumer protections under the Truth-in-Lending Act.
"It's long past time we shore up key sections of the law that are outdated," the House Banking Committee's ranking Democrat said. "My legislation ensures that consumers continue to be covered under meaningful disclosure laws with teeth and don't fall victim to deceitful and misleading credit practices."
The bill would extend the law's mandatory cost disclosures to home equity and other consumer loans under $50,000. The current cut-off of $25,000 was set more than 30 years ago, when costs were much lower, and it does not apply to most consumer credit and lease transactions, Rep. LaFalce said.
Creditors that violate Truth-in-Lending requirements would be liable for as much as $5,000 in statutory damages, up from the current $1,000 maximum. The cap on damages for class actions would be doubled to $1 million.