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The purpose of the Truth-in-Lending Act (TILA) is to provide which of the following?

A. Meaningful disclosure of credit terms of the loan to the borrower.
B. Guaranteed approval of credit applications.
C. Mandatory interest rate caps on loans.
D. Strict regulation of lending institutions.

User Billie
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1 Answer

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Final answer:

The Truth-in-Lending Act's primary purpose is to provide borrowers with clear and detailed information regarding credit terms, ensuring transparency and informed decision-making in the borrowing process.

Step-by-step explanation:

The purpose of the Truth-in-Lending Act (TILA) is to provide meaningful disclosure of credit terms of the loan to the borrower. The correct answer is A. Meaningful disclosure of credit terms of the loan to the borrower. TILA ensures that borrowers are fully informed about the costs and terms of credit before they enter into a loan agreement. Guarantees for credit approval, mandatory interest rate caps, or the strict regulation of lending institutions go beyond the direct purpose of TILA. Rather, TILA focuses on transparency and fairness, preventing discrimination, and requiring lenders to disclose key information about the loans they offer. This helps borrowers compare different loan offers and make informed financial decisions.

User SVSchmidt
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