Question

The Truth-in-Lending Act (Law)

a) does nothing to help consumers.
b) sets the limit one can charge consumers on credit transactions.
c) requires lenders provide the customer the finance charge and the annual percentage
rate on a loan. d) refers to the number of points one must have on their credit application.

Answer 1

The Truth-in-Lending Act requires lenders to disclose the finance charge and APR, helping consumers make informed credit decisions and does not set interest rate ceilings.

Step-by-step explanation:

The Truth-in-Lending Act, relevant to the field of business and financial markets, plays a crucial role in protecting consumers by mandating full disclosure of credit terms. Specifically, the correct answer to the student's question is option (c) which states that the act requires lenders to provide the customer with the finance charge and the annual percentage rate (APR) on a loan. This disclosure helps in making informed decisions and comparisons between different credit offers. Unlike usury laws which impose an upper limit on the interest rates that can be charged, the Truth-in-Lending Act does not set interest rate ceilings but ensures transparency in lending practices.