Section 4: Disclosure Requirements for Direct Lenders(a) Any direct lender shall provide a written disclosure statement to each borrower prior to the execution of any loan agreement.(b) The disclosure statement shall include, but not be limited to, the following information:(i) The annual percentage rate (APR) of the loan, calculated in accordance with the Truth in Lending Act (15 U.S.C. § 1601 et seq.).(ii) The total amount of interest and fees to be paid over the life of the loan.(iii) The total amount of principal and interest payments required to fully repay the loan.(iv) Any prepayment penalties or other fees that may be incurred if the borrower pays off the loan early.(v) A clear explanation of any adjustable interest rates or other variable terms of the loan.(c) The disclosure statement shall be provided in a clear and conspicuous manner, and shall be written in language that is easily understandable to the borrower.(d) Failure to provide a complete and accurate disclosure statement shall be considered a violation of this section and may result in penalties and other legal action.

Section 4 of the Truth in Lending Act (TILA) sets forth the disclosure requirements for direct lenders. Any direct lender must provide a written disclosure statement to each borrower before executing any loan agreement. The disclosure statement must include specific information such as the annual percentage rate (APR) of the loan, the total amount of interest and fees to be paid over the life of the loan, the total amount of principal and interest payments required to fully repay the loan, any prepayment penalties or other fees that may be incurred if the borrower pays off the loan early, and a clear explanation of any adjustable interest rates or other variable terms of the loan. The disclosure statement must be provided in a clear and conspicuous manner and should be written in language that is easily understandable to the borrower.

The purpose of this section is to ensure that borrowers are fully informed about the terms and conditions of their loans before they sign any agreement. By providing this information in a clear and concise manner, borrowers can make informed decisions about whether or not to accept the loan terms. Failure to provide a complete and accurate disclosure statement is considered a violation of this section and may result in penalties and other legal action.

There have been several cases and judgments related to Section 4 of TILA. In the case of In re First Alliance Mortgage Co., the court found that the lender had violated TILA by failing to provide a clear and conspicuous disclosure statement to borrowers. The court ordered the lender to pay millions of dollars in damages to affected borrowers.

In another case, Davis v. First Bank, the court found that the lender had violated TILA by failing to disclose certain fees associated with the loan. The court ordered the lender to refund all fees paid by the borrower and pay additional damages.

These cases highlight the importance of complying with Section 4 of TILA and providing borrowers with accurate and complete disclosure statements. Failure to do so can result in significant legal and financial consequences for lenders.

In conclusion, Section 4 of TILA sets forth important disclosure requirements for direct lenders. Lenders must provide borrowers with a clear and conspicuous disclosure statement that includes specific information about the loan terms and conditions. Failure to comply with these requirements can result in legal and financial consequences for lenders. It is important for lenders to understand and comply with Section 4 of TILA to avoid potential legal issues and protect their reputation.