Certified Revenue Cycle Representative (CRCR) Practice Exam

Which of the following is a key requirement of the Truth in Lending Act?

1. Transparency in loan interest rates

2. Disclosure rules for consumer credit sales

3. Reduction of fees for consumers

4. Regulation of credit card companies

The correct answer is: Disclosure rules for consumer credit sales

The Truth in Lending Act (TILA) primarily aims to promote informed use of consumer credit by requiring clear disclosure of the terms and conditions of credit agreements. A key requirement of this act is the establishment of disclosure rules for consumer credit sales, which ensures that borrowers receive important information about the cost of credit. This includes details such as the annual percentage rate (APR), terms of repayment, and any associated fees or charges. The emphasis on disclosure helps consumers make educated decisions about borrowing and protects them from deceptive lending practices. By mandating that lenders provide this critical information in a clear and concise manner, the act facilitates transparency and empowers consumers to compare different credit offers effectively. While transparency in loan interest rates and regulation of credit card companies are important aspects of the broader financial landscape, they fall under the broader implications of TILA rather than its specific key requirements. Similarly, the reduction of fees, although favorable for consumers, is not a primary objective outlined in the Truth in Lending Act.