Which act requires lenders to disclose the annual percentage rate and other loan terms?

The Truth in Lending Act (TILA) is designed to promote informed use of consumer credit. One of its key requirements is that lenders disclose the annual percentage rate (APR) along with other critical loan terms, such as the total finance charges and the payment schedule. This transparency helps borrowers understand the true cost of credit and facilitates comparisons between different loan offers.

By mandating these disclosures, TILA aims to prevent deceptive lending practices and to empower consumers to make informed decisions regarding their borrowing options. This is particularly important in the real estate sector, where loans can be substantial and complex.

In contrast, while the Real Estate Settlement Procedures Act (RESPA) does focus on other important disclosures related to real estate transactions, it does not specifically require the disclosure of the APR. The Fair Housing Act (FHA) is primarily concerned with preventing discrimination in housing-related activities and does not address lending disclosures. The Home Mortgage Disclosure Act (HMDA) requires certain lenders to report data about home mortgage applications and loans, but it does not specifically enforce the disclosure of loan terms. Therefore, the emphasis on loan terms and transparency in lending distinctly aligns with the objectives of TILA.