Final answer:
The Truth in Lending Act (TILA) requires disclosure of credit terms and costs, while the Equal Credit Opportunity Act prevents discrimination in credit transactions. The Fed ensures banks adhere to these laws to protect consumers.
Step-by-step explanation:
The Act that prescribes the general disclosure requirements for those offering or extending consumer credit, as well as the specific disclosure requirements for open-end and installment credit transactions, is known as the Truth in Lending Act (TILA). This Act is part of the Consumer Credit Protection Act and is designed to help consumers better understand the terms of credit offered to them by requiring clear disclosure of important terms and the cost of credit in a standardized format. Additionally, the Equal Credit Opportunity Act prohibits discrimination in any aspect of a credit transaction based on race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance. The Federal Reserve, often referred to as the Fed, is responsible for ensuring that banks comply with these consumer protection laws.
While TILA handles the cost of credit and the disclosures related to terms, other acts such as the Fair Credit Reporting Act and the Financial Services Modernization Act play their roles in protecting consumer financial information and privacy. Collectively, these acts form a substantial part of the regulation within the financial services industry, contributing to consumer rights and protections.