Consumer Leasing Act

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The Consumer Leasing Act (CLA) was enacted in 1976 as part of the Truth in Lending Act (TILA) to protect lessees from unclear or deceiving statements and advertisements by lessors. The CLA applies only to leases for personal purposes that are longer than four months and cost less than or equal to $50,000, not for commercial or business purposes. Congress limited the CLA in this way because its goal was to protect the average lessee with less resources and experience from abuse, but the concept does not extend to expensive or commercial leases because the lessee has more resources to ensure fair lease terms and bear the costs of misunderstandings. The CLA protects lessees by requiring every covered lease to contain explicit details about rent costs, payments dates, other costs, termination details, and any warranties on the property. Also, lessors are required to include many of the same details in lease advertisements to prevent misleading communication of the overall lease price. 

[Last updated in June of 2021 by the Wex Definitions Team]