Which act mandates disclosure of the Annual Percentage Rate (APR)?

The Truth in Lending Act (TILA) is the legislation that requires lenders to disclose the Annual Percentage Rate (APR) to consumers. This act is designed to ensure that borrowers have clear and consistent information about the costs associated with borrowing money, including the interest rates and other charges that may apply.

The disclosure of APR is crucial because it allows consumers to understand the true cost of credit over the life of a loan, facilitating informed decision-making when comparing different lending options. By standardizing how interest rates are presented, the Truth in Lending Act promotes transparency in lending practices, helping consumers avoid predatory lending and improve their overall financial literacy.

Other acts mentioned do play important roles in consumer protection but do not specifically mandate the disclosure of APR. The Fair Credit Reporting Act primarily governs the collection and use of consumer credit information. The Consumer Credit Protection Act encompasses broader provisions aimed at protecting consumers in credit transactions. The Equal Credit Opportunity Act focuses on preventing discrimination in credit lending.