Which federal law requires disclosure about annual percentage rates and finance charges?

The correct response is the Truth in Lending Act (TILA), which was enacted to promote informed use of consumer credit by requiring disclosures about its terms and costs. One of the key components of TILA is the requirement for lenders to disclose the annual percentage rate (APR) and the finance charges associated with a loan. This ensures that borrowers can understand and compare the costs of credit, thereby making informed financial decisions.

Under TILA, borrowers are provided with a standardized format for these disclosures, which aids in transparency and allows for easier comparison across different lending options. This law plays a critical role in defining the responsibilities of lenders and protecting consumers from misleading practices related to the costs of borrowing.

The other federal laws mentioned do not specifically require disclosures about annual percentage rates and finance charges in the same manner as TILA. The Fair Housing Act focuses on preventing discrimination in housing, the Real Estate Settlement Procedures Act addresses settlement costs and procedures in real estate transactions, and the Equal Credit Opportunity Act prohibits discrimination in credit transactions. Each of these laws serves important functions but does not cover the disclosure of APR and finance charges like TILA does.