What is the law that requires lenders to charge a discount fee for lowering interest rates?

The Real Estate Settlement Procedures Act (RESPA) is designed to promote transparency in the real estate settlement process and protect consumers from abusive practices. While RESPA covers various aspects of mortgage transactions, it specifically addresses the requirement for lenders to provide clear information about settlement costs, including fees.

In the context of discount fees, RESPA mandates that lenders disclose these fees, ensuring consumers understand the costs associated with lowering their interest rates. The act's goal is to prevent hidden fees and to ensure borrowers are fully informed about the specific costs involved in originating a loan, including the discount points that can lower the interest rate.

The other options identify important legislation in the realm of mortgage loan practices but do not focus specifically on the requirement for lenders to charge a discount fee for interest rate reductions. The Home Mortgage Disclosure Act (HMDA) primarily relates to the collection and reporting of data regarding mortgage lending, the Equal Credit Opportunity Act (ECOA) focuses on preventing discrimination in lending, and the Truth in Lending Act (TILA) ensures borrowers are aware of the terms and costs of credit. However, when it comes to the specific requirement regarding discount fees, RESPA is the relevant legislation.