Certified Revenue Cycle Representative (CRCR) Practice Exam

What does Regulation Z of the Consumer Credit Protection Act establish?

1. Rules for consumer credit reporting

2. Disclosure rules for consumer credit sales and loans

3. Guidelines for credit card interest rates

4. Requirements for loan eligibility

The correct answer is: Disclosure rules for consumer credit sales and loans

Regulation Z of the Consumer Credit Protection Act primarily establishes disclosure rules for consumer credit sales and loans. It is specifically designed to ensure that consumers are provided with clear and conspicuous information regarding the terms and costs of credit. This includes the total cost of borrowing, the annual percentage rate (APR), and other important details that affect a consumer's decision-making process when obtaining credit. The objective of these disclosure requirements is to promote transparency and allow consumers to compare credit offers more effectively, thereby fostering informed financial choices. The other options, while they pertain to aspects of consumer credit, do not capture the primary focus of Regulation Z. For instance, rules for consumer credit reporting relate more to how consumer credit information is gathered and used, guidelines for credit card interest rates may fall under other regulatory frameworks, and requirements for loan eligibility pertain to lending practices rather than disclosure of terms. Therefore, option B accurately reflects the core purpose of Regulation Z in the context of the Consumer Credit Protection Act.