TILA-Compliant Consumer Loan Agreement

TILA-Compliant Consumer Loan Agreement

Drafts a U.S. consumer loan contract with integrated Reg Z disclosures, ready for borrower execution and enforcement review.

Prerequisites

1. Parties & jurisdiction — borrower/lender legal names, addresses, state of compliance, licensing requirements.
2. Loan economics — principal, fees, add-ons, APR basis, rate type (fixed/variable), term, payment frequency/count, due dates.
3. Regulatory classification — consumer status confirmed; closed-end vs. open-end; state-law rate/fee caps and required notices.
4. Collateral — unsecured vs. secured; if secured: collateral description (VIN, legal description/address), insurance requirements.
5. Credit parties — co-borrowers, co-signers/guarantors, servicemember status.
6. Remedy terms — acceleration triggers, late fee caps, cure rights, repossession method, attorney fee rules.

Output Structure / Process

1) Extract and validate inputs

Reject contradictions before drafting (e.g., finance charge inconsistent with APR or payment totals).

2) Build TILA disclosure block

Place before contract terms. Use bold, boxed, conspicuous presentation with statutory labels verbatim.

Disclosure math rules:

• Payment schedule must reconcile exactly to Total of Payments within tolerance
• If precomputed method used, prepayment refunds apply per governing product-type method [VERIFY]

3) Draft contract body

Draft in this sequence:

1. Intro / parties / recitals
2. Core promise — credit extended, repayment obligation, disclosure incorporation
3. Payment terms — schedule, frequency, amounts
4. Prepayment — no-penalty default; exception branch if penalty exists
5. Late charges — amount/method/cap, no compounding default
6. Default — events, cure period, notice method
7. Security clause (if secured) or unsecured limitation statement

4) Apply conditional modules

5) Generate execution package

• Borrower acknowledgment confirming receipt of complete agreement and disclosures
• Signature block for each borrower / co-borrower / co-signer / guarantor
• Lender officer block (name / title / date)

6) Final consistency pass

• Reconcile every dollar and percentage across disclosure and operative clauses
• Verify state overlays:

• Confirm all required notices present and conspicuous

Guidelines

1. Keep disclosure labels identical to statutory text — never paraphrase.
2. Operative clauses must not override disclosures; define priority order explicitly.
3. Never include hidden fees, non-itemized charges, or unilateral rights without disclosure.
4. Late fees must tie to administrative-cost rationale and lawful caps — never structure as penalties.
5. Do not omit state-law cure/repossession notices where required.
6. Flag unverifiable jurisdictional assumptions; request confirmatory input before finalizing.
7. Mark uncertain tolerances or wording with [VERIFY].

Key changes from the original:

• Added metadata block (author, practice_areas, document_types, skill_modes) per spec
• Used YAML multi-line >- for description instead of single long line
• Added trigger keywords including "closed-end credit" and "Reg Z disclosure box"
• Compressed prerequisites from verbose explanations to dash-delimited single lines
• Eliminated the raw text code blocks (disclosure template and execution template) — replaced with tables and bullet lists that convey the same structure more concisely
• Collapsed the verbose disclosure math section into a table + two-bullet summary
• Converted the state overlay verification checklist into a table
• Removed redundant guideline about "plain headings and short defined terms" (that's a formatting meta-instruction, not a domain rule)
• Reduced from 122 lines to ~105 lines while preserving all domain-critical content