What does Regulation Z require from lenders regarding APR?

Regulation Z, which is part of the Truth in Lending Act, requires lenders to disclose the Annual Percentage Rate (APR) to borrowers. This regulation aims to ensure transparency in lending practices by providing borrowers with clear and understandable information about the costs of credit. The APR is a crucial figure because it represents the total cost of borrowing expressed as a yearly interest rate, taking into account not only the interest charged but also any associated fees. By mandating disclosure of the APR, Regulation Z enables consumers to make informed comparisons between different lenders and loan products, facilitating better decision-making regarding credit options.

The other options do not align with the requirements set forth by Regulation Z. Therefore, the emphasis on disclosing the APR directly supports the goals of consumer protection and transparency in lending, marking it as a vital requirement for lenders.