Which type of credit is NOT typically covered by the Truth in Lending Act?

The Truth in Lending Act (TILA) is designed to promote informed use of consumer credit by requiring disclosures about its terms and costs. While various types of consumer credit are subject to TILA, certain types, such as business loans, are generally excluded from its purview.

Business loans are not covered by TILA because the act primarily focuses on consumer credit, which is intended for personal, family, or household purposes. The rationale behind this exemption is that TILA aims to protect individuals in their capacity as consumers, whereas businesses are seen as being capable of negotiating and understanding the terms of their credit arrangements without the same level of consumer protection.

In contrast, closed-end credit and open-ended revolving credit are both forms of consumer credit that are clearly within the scope of TILA. Personal loans also fall under TILA coverage as they are typically obtained for personal use. Therefore, understanding which types of credit TILA applies to is crucial for ensuring compliance and protecting consumers.