Which act primarily governs the requirement of lenders to disclose loan terms and costs?

The Truth in Lending Act (TILA) is the act that primarily governs the requirement of lenders to disclose loan terms and costs. Enacted in 1968, TILA was designed to promote informed consumers and ensure that borrowers receive clear and comprehensible information about the costs associated with borrowing. This includes key disclosures such as the Annual Percentage Rate (APR), the terms of the loan, and all associated fees, allowing borrowers to understand the true cost of a loan and compare different offers more easily.

TILA aims to protect consumers from misleading practices by standardizing the information provided by lenders, which is crucial for fostering transparency in the lending process. By requiring clear disclosure, the act helps to prevent potential abuses and ensures that borrowers can make informed decisions about their loans.

The other acts mentioned serve different purposes. The Equal Credit Opportunity Act focuses on prohibiting discrimination in credit transactions. The Home Mortgage Disclosure Act ensures that financial institutions provide data on home mortgages to assess lending patterns in communities. The Fair Credit Reporting Act regulates the collection and use of consumer credit information, ensuring accuracy and privacy. Each of these acts addresses important aspects of lending and consumer protection, but only TILA specifically mandates the disclosure of loan terms and costs.