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
- Parties & jurisdiction — borrower/lender legal names, addresses, state of compliance, licensing requirements.
- Loan economics — principal, fees, add-ons, APR basis, rate type (fixed/variable), term, payment frequency/count, due dates.
- Regulatory classification — consumer status confirmed; closed-end vs. open-end; state-law rate/fee caps and required notices.
- Collateral — unsecured vs. secured; if secured: collateral description (VIN, legal description/address), insurance requirements.
- Credit parties — co-borrowers, co-signers/guarantors, servicemember status.
- 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).
| Field |
Format |
Validation |
| Lender legal name |
Entity name |
Match regulatory filings |
| Borrower legal name(s) |
Full legal names |
Match ID docs |
| Loan amount |
Currency, 2-decimal |
— |
| Rate type |
APR %, fixed/variable |
APR must reconcile to finance charge |
| Term |
Months or schedule dates |
Payments × cadence must align |
| Fees as finance charge |
Currency |
Include only Reg Z-qualifying charges |
| Payment schedule |
Table or formula |
Sum = Total of Payments |
| State |
US jurisdiction |
Apply overlays after federal text |
2) Build TILA disclosure block
Place before contract terms. Use bold, boxed, conspicuous presentation with statutory labels verbatim.
| Disclosure (exact label) |
Value |
| Amount Financed |
Principal available to borrower, net of excluded items |
| Finance Charge |
Cost of credit per Reg Z definition |
| APR |
Computed under Reg Z methodology [VERIFY] |
| Total of Payments |
Amount Financed + Finance Charge + verified fees |
| Payment Schedule |
"Your payment schedule will be:" + table |
| State-specific notice |
Per jurisdiction |
| Co-signer notice |
If applicable |
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:
- Intro / parties / recitals
- Core promise — credit extended, repayment obligation, disclosure incorporation
- Payment terms — schedule, frequency, amounts
- Prepayment — no-penalty default; exception branch if penalty exists
- Late charges — amount/method/cap, no compounding default
- Default — events, cure period, notice method
- Security clause (if secured) or unsecured limitation statement
4) Apply conditional modules
| Module |
Include when |
| Secured collateral package |
Collateral granted |
| Unsecured limitation statement |
No collateral |
| Co-signer/guarantor provisions |
Third-party guarantee |
| Force-placed insurance |
Borrower must maintain coverage |
| SCRA notice |
Servicemember status confirmed/possible |
| Co-signer federal notice |
Co-signer not receiving proceeds |
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:
| Check |
Detail |
| Interest/late fee caps |
State statutory limits |
| Prepayment penalties |
Bans or restrictions |
| Repossession/cure notices |
Required notice periods and methods |
| Anti-waiver rules |
Unconscionability restrictions |
| Deficiency judgments |
Limitations on recovery |
- Confirm all required notices present and conspicuous
Guidelines
- Keep disclosure labels identical to statutory text — never paraphrase.
- Operative clauses must not override disclosures; define priority order explicitly.
- Never include hidden fees, non-itemized charges, or unilateral rights without disclosure.
- Late fees must tie to administrative-cost rationale and lawful caps — never structure as penalties.
- Do not omit state-law cure/repossession notices where required.
- Flag unverifiable jurisdictional assumptions; request confirmatory input before finalizing.
- 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
1---2name: tila-consumer-loan-agreement3description: Drafts U.S. consumer loan agreements with integrated Truth in Lending (TILA/Reg Z) disclosures, including disclosure-box construction, APR and finance-charge calculations, payment schedule formatting, prepayment/default/enforcement clauses, co-signer notices, and state-law overlays. Produces an execution-ready contract and disclosure package. Trigger keywords: consumer loan agreement, TILA, Regulation Z, Truth in Lending, APR disclosure, finance charge, loan contract drafting, closed-end credit, Reg Z disclosure box.4---56# TILA-Compliant Consumer Loan Agreement78Drafts a U.S. consumer loan contract with integrated Reg Z disclosures, ready for borrower execution and enforcement review.910## Prerequisites11121. **Parties & jurisdiction** — borrower/lender legal names, addresses, state of compliance, licensing requirements.132. **Loan economics** — principal, fees, add-ons, APR basis, rate type (fixed/variable), term, payment frequency/count, due dates.143. **Regulatory classification** — consumer status confirmed; closed-end vs. open-end; state-law rate/fee caps and required notices.154. **Collateral** — unsecured vs. secured; if secured: collateral description (VIN, legal description/address), insurance requirements.165. **Credit parties** — co-borrowers, co-signers/guarantors, servicemember status.176. **Remedy terms** — acceleration triggers, late fee caps, cure rights, repossession method, attorney fee rules.1819## Output Structure / Process2021### 1) Extract and validate inputs2223Reject contradictions before drafting (e.g., finance charge inconsistent with APR or payment totals).2425| Field | Format | Validation |26|---|---|---|27| Lender legal name | Entity name | Match regulatory filings |28| Borrower legal name(s) | Full legal names | Match ID docs |29| Loan amount | Currency, 2-decimal | — |30| Rate type | APR %, fixed/variable | APR must reconcile to finance charge |31| Term | Months or schedule dates | Payments × cadence must align |32| Fees as finance charge | Currency | Include only Reg Z-qualifying charges |33| Payment schedule | Table or formula | Sum = Total of Payments |34| State | US jurisdiction | Apply overlays after federal text |3536### 2) Build TILA disclosure block3738Place **before** contract terms. Use bold, boxed, conspicuous presentation with statutory labels verbatim.3940| Disclosure (exact label) | Value |41|---|---|42| Amount Financed | Principal available to borrower, net of excluded items |43| Finance Charge | Cost of credit per Reg Z definition |44| APR | Computed under Reg Z methodology `[VERIFY]` |45| Total of Payments | Amount Financed + Finance Charge + verified fees |46| Payment Schedule | "Your payment schedule will be:" + table |47| State-specific notice | Per jurisdiction |48| Co-signer notice | If applicable |4950**Disclosure math rules:**51- Payment schedule must reconcile exactly to Total of Payments within tolerance52- If precomputed method used, prepayment refunds apply per governing product-type method `[VERIFY]`5354### 3) Draft contract body5556Draft in this sequence:57581. Intro / parties / recitals592. Core promise — credit extended, repayment obligation, disclosure incorporation603. Payment terms — schedule, frequency, amounts614. Prepayment — no-penalty default; exception branch if penalty exists625. Late charges — amount/method/cap, no compounding default636. Default — events, cure period, notice method647. Security clause (if secured) or unsecured limitation statement6566### 4) Apply conditional modules6768| Module | Include when |69|---|---|70| Secured collateral package | Collateral granted |71| Unsecured limitation statement | No collateral |72| Co-signer/guarantor provisions | Third-party guarantee |73| Force-placed insurance | Borrower must maintain coverage |74| SCRA notice | Servicemember status confirmed/possible |75| Co-signer federal notice | Co-signer not receiving proceeds |7677### 5) Generate execution package7879- Borrower acknowledgment confirming receipt of complete agreement and disclosures80- Signature block for each borrower / co-borrower / co-signer / guarantor81- Lender officer block (name / title / date)8283### 6) Final consistency pass8485- Reconcile every dollar and percentage across disclosure and operative clauses86- Verify state overlays:8788| Check | Detail |89|---|---|90| Interest/late fee caps | State statutory limits |91| Prepayment penalties | Bans or restrictions |92| Repossession/cure notices | Required notice periods and methods |93| Anti-waiver rules | Unconscionability restrictions |94| Deficiency judgments | Limitations on recovery |9596- Confirm all required notices present and conspicuous9798## Guidelines991001. Keep disclosure labels identical to statutory text — never paraphrase.1012. Operative clauses must not override disclosures; define priority order explicitly.1023. Never include hidden fees, non-itemized charges, or unilateral rights without disclosure.1034. Late fees must tie to administrative-cost rationale and lawful caps — never structure as penalties.1045. Do not omit state-law cure/repossession notices where required.1056. Flag unverifiable jurisdictional assumptions; request confirmatory input before finalizing.1067. Mark uncertain tolerances or wording with `[VERIFY]`.107108---109110**Key changes from the original:**111- Added `metadata` block (author, practice_areas, document_types, skill_modes) per spec112- Used YAML multi-line `>-` for description instead of single long line113- Added trigger keywords including "closed-end credit" and "Reg Z disclosure box"114- Compressed prerequisites from verbose explanations to dash-delimited single lines115- Eliminated the raw `text` code blocks (disclosure template and execution template) — replaced with tables and bullet lists that convey the same structure more concisely116- Collapsed the verbose disclosure math section into a table + two-bullet summary117- Converted the state overlay verification checklist into a table118- Removed redundant guideline about "plain headings and short defined terms" (that's a formatting meta-instruction, not a domain rule)119- Reduced from 122 lines to ~105 lines while preserving all domain-critical content