What was the primary purpose of enacting the Truth in Lending Act (TILA)?

The primary purpose of enacting the Truth in Lending Act (TILA) was to prevent abuses in consumer credit cost disclosures. This federal law, passed in 1968, was designed to promote transparency in lending practices by requiring lenders to disclose the true costs of borrowing, including interest rates and other significant charges. The aim was to ensure that consumers could make informed decisions when obtaining credit, thereby protecting them from misleading practices and ensuring fair treatment in the lending process.

TILA mandates clear and conspicuous disclosures about the terms of credit, allowing borrowers to compare different loan products effectively. This focus on transparency helps to empower consumers and plays a vital role in fostering trust in the financial system.

The other options do not align with the main objectives of TILA. For instance, while handling settlement procedures is crucial, TILA primarily focuses on credit disclosure. Enabling banks to sell mortgages more easily or delaying closings does not capture the essence of TILA's intent to protect consumer rights and ensure fair lending practices.