Which regulation requires lenders to disclose the finance charge and APR?

The Truth in Lending Act (TILA) is the regulation that mandates lenders to provide clear and transparent information regarding the cost of credit, specifically through the disclosure of the finance charge and the annual percentage rate (APR). This law was established to ensure that consumers receive essential information that enables them to compare different credit offers, understand the cost of borrowing, and make informed financial decisions.

The finance charge represents the total cost of borrowing, expressed as a dollar amount, while the APR encapsulates the cost of credit on an annual basis, including the interest rate and any associated fees. By requiring these disclosures, TILA aims to promote honesty and transparency in lending practices, thereby protecting consumers from any hidden costs and predatory lending practices.

The other options refer to different regulations—CFPB oversees enforcement and rules related to consumer financial products; ECOA focuses on prohibiting discrimination in credit transactions; and RESPA deals with transparency in the real estate settlement process. These regulations address different aspects of financial transactions and consumer protection but do not specifically cover the disclosure of finance charge and APR as TILA does.