While it is still fine print it has become enormously more understandable due to the Federal Truth in Lending Act (TILA) of 1968, also known as Regulation Z of the Consumer Protection Act.  Before that time, it was fine print that was not understandable except the lawyers who wrote it.  The federal law was enacted to protect consumers during financial and credit transactions and clearly spell out the key terms of the deal while disclosing all the financial costs in a format that the average consumer can understand. It assures that all statements in personal and family matters are written in a clear and concise manner for the consumer.

By requiring disclosures about its loan and credit terms, a standard manner in which costs associated with borrowing for home loans, car loans, credit cards or any other financial instrument are calculated and disclosed, the purpose of TILA was to promote the informed and fair use of consumer credit.  TILA also allows the consumer to cancel certain transactions that are related to liens on a principal dwelling, regulates credit card rates and fees and provides a way for consumer to dispute erroneous reports on their credit.

As TILA pertains to credit cards, it limits the consumers risk to $50 if their card is lost, it also ensures that interest rates and fees are clearly stated and that consumers are notified of any changes to the agreed upon terms.  As mentioned, any financial arrangement that involved a lien on your primary residence gives the home owner or borrower 3 days to cancel, commonly known as the Right of Rescission.

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TILA also was intended to protect consumers from borrowing more than they had the ability to pay back.  Lenders were supposed to take the ability to repay into consideration before lending money to a borrower.   TILA has been extremely helpful for consumers understanding what documents they were signed and what fees they were getting charged but it did not stop lenders from trying to make a buck from consumer who may not be able to repay loans at a later time.