What does the Truth in Lending Act require lenders to do?

The Truth in Lending Act (TILA) is designed to promote informed consumer decision-making by requiring lenders to clearly disclose the terms and costs associated with borrowing. This includes providing essential information such as the annual percentage rate (APR), finance charges, and the total cost of the loan over its term. By mandating these disclosures, TILA aims to ensure that borrowers can understand and compare the costs of different loan offers, ultimately promoting transparency in the lending process. This transparency empowers consumers to make more informed financial decisions and helps prevent deceptive lending practices.

In contrast, the other options focus on areas that are not the primary focus of TILA. Offering lower interest rates, while appealing to consumers, is not a requirement of the act. Disclosing personal financial information is not mandated by TILA, as the regulation focuses more on lenders providing clear information about loan terms rather than requiring personal disclosures. Lastly, while informing consumers about credit card fraud is important for consumer protection, it falls outside the scope of TILA, which is primarily concerned with loan disclosures rather than fraud awareness.