The U.S. Supreme Court issued a decision that limits the amount of damages dealers, banks and finance companies must pay for violating the federal Truth in Lending Act. TILA requires lenders to fully disclose financing terms. Industry associations said this ruling could save the financial services industry as much as $2.9 billion in increased damages on new- and used-car loans.

The court ruled Nov. 30 that a 1968 consumer-protection law generally caps damages at $1,000 when the consumer hasn´t proven the amount of actual harm, reported Bloomberg.com. The decision overturned a $24,192 award to a car buyer who won a suit against a Virginia used-car dealer for truth-in-lending violations.

The car buyer, Bradley Nigh, said that Koons Buick Pontiac GMC charged him $965 for a car alarm he didn´t ask for. The federal court in Alexandria, Va., said the law permitted an award of twice the financing charge, or $24,192. The 4th Circuit Court of Appeals in Richmond, Va., agreed, saying the $1,000 limit on damages only applied to consumer leases and not to the other section on other kinds of loans and credit transactions.

But Justice Ruth Bader Ginsburg, in her opinion for the Supreme Court, said the appeals court was wrong. She said the $1,000 cap applies to both leases and loans. The court ruled 8-1 in favor of the cap.