Which federal law requires lenders to disclose the cost of credit using uniform standards?

Which federal law requires lenders to disclose the cost of credit using uniform standards?

• A. Consumer Credit Protection Act
• B. Truth-In-Lending Act
• C. Fair Housing Act
• D. Equal Credit Opportunity Act

Answer: (B)

The Truth-In-Lending Act is the federal law that mandates lenders to disclose the cost of credit using uniform standards. This law was established to promote informed use of consumer credit by requiring clear and standardized disclosures about loan terms and conditions. The intent behind this act is to ensure that consumers can make informed financial decisions by understanding the true cost of borrowing, including interest rates, fees, and other relevant financial information. By standardizing how this information is presented, the Truth-In-Lending Act helps to reduce confusion and allows consumers to compare offers from different lenders more easily. This transparency is a critical element in helping consumers understand and manage their financial responsibilities. In contrast, other laws such as the Consumer Credit Protection Act, the Fair Housing Act, and the Equal Credit Opportunity Act address different aspects of consumer rights and credit practices, but they do not focus specifically on the uniform disclosure of credit costs.

The Truth-In-Lending Act is the federal law that mandates lenders to disclose the cost of credit using uniform standards. This law was established to promote informed use of consumer credit by requiring clear and standardized disclosures about loan terms and conditions. The intent behind this act is to ensure that consumers can make informed financial decisions by understanding the true cost of borrowing, including interest rates, fees, and other relevant financial information.

By standardizing how this information is presented, the Truth-In-Lending Act helps to reduce confusion and allows consumers to compare offers from different lenders more easily. This transparency is a critical element in helping consumers understand and manage their financial responsibilities.

In contrast, other laws such as the Consumer Credit Protection Act, the Fair Housing Act, and the Equal Credit Opportunity Act address different aspects of consumer rights and credit practices, but they do not focus specifically on the uniform disclosure of credit costs.