What federal act requires lenders to disclose certain loan information to borrowers?

The correct answer is the Truth in Lending Act. This federal law mandates that lenders provide clear and concise information about the terms and costs of loans to borrowers. Its primary purpose is to promote informed decision-making by ensuring that individuals are aware of the costs associated with borrowing, including interest rates, finance charges, and annual percentage rates (APR).

By requiring lenders to disclose this essential information upfront, the Truth in Lending Act helps to protect consumers from deceptive lending practices and enables them to compare different loan offers effectively. This act plays a crucial role in fostering transparency in the lending process, which ultimately benefits both borrowers and lenders by creating a more reliable and trustworthy lending environment.

The other acts mentioned, while important in their own right, focus on different aspects of lending and housing. RESPA (Real Estate Settlement Procedures Act) is primarily concerned with disclosures related to the settlement process and prohibiting kickbacks in real estate. The Equal Credit Opportunity Act focuses on preventing discrimination in lending based on protected characteristics. The Fair Housing Act addresses discrimination in housing, ensuring equal access to housing opportunities regardless of race, color, religion, sex, handicap, familial status, or national origin. Each of these acts serves a unique purpose, but the specific requirement for loan information disclosure lies