Final answer:
The Truth-in-Lending Act (Regulation Z) is responsible for regulating misleading information about interest rates and hidden finance fees provided to consumers. It ensures transparent disclosures of loan terms and protects against unfair practices.
Step-by-step explanation:
The legislation that regulates misleading information to consumers about interest rates and hidden finance fees is the Truth-in-Lending Act (Regulation Z). This act requires lenders to provide consumers with clear and standardized disclosures about the terms and costs of loans, including information about the annual percentage rate (APR), the total costs of credit, and any finance charges. The Act aims to promote the informed use of credit among consumers and to protect them from unfair billing practices and misleading credit advertising.
Banks must also comply with regulations that prevent them from discriminating based on age, race, sex, or marital status. Furthermore, banks are required to disclose publicly how they distribute loans for house buying, including geographic distribution and breakdown by sex and race of loan applicants. Additionally, credit card issuers must cover the losses from those who fail to repay on time; however, cardholders can avoid interest by paying bills promptly.