The Consumer Leasing Act (CLA), also known as the Federal Consumer Leasing Act, is a federal law enacted in the United States to protect consumers who lease personal property for personal, family, or household purposes. The CLA is an amendment to the Truth in Lending Act (TILA), which focuses on providing transparency in consumer credit transactions.
Under the Consumer Leasing Act, leasing entities are obligated to disclose important information before entering into a lease agreement. This disclosure includes the total amount due at lease signing, the number of monthly payments, the cost of each payment, and any additional fees or charges. The purpose of these disclosures is to enable consumers to make informed decisions about leasing arrangements and avoid hidden costs or deceptive terms.
The CLA also establishes remedies for consumers in cases of leasing fraud or deceptive practices. It allows consumers to cancel certain leases within a specified period, usually three days, without penalty. Furthermore, it restricts the leasing company's ability to impose penalties for early termination of a lease.
The Consumer Leasing Act applies to leases that have a term of more than four months and where the total amount due exceeds a predetermined threshold set by the Federal Reserve. Exclusions to the Act include leases for agricultural, business, or commercial purposes.
Overall, the Consumer Leasing Act aims to protect consumers from unfair or deceptive practices in lease agreements and ensures that they have access to clear and accurate information to make informed choices.
