Which of the following is a requirement of the Federal Truth-in-Lending Act (TILA)?

The Federal Truth-in-Lending Act (TILA) aims to promote informed use of consumer credit by requiring disclosures about its terms and costs. One of its primary requirements is that lenders must clearly disclose the Annual Percentage Rate (APR) as well as other vital terms of the loan. This enables borrowers to compare the costs of credit from different lenders effectively and to understand the true cost of borrowing.

This focus on transparency is essential for consumer protection, as it ensures that borrowers are aware of the interest rates and the overall cost of credit before they commit to a loan. By mandating the disclosure of the APR, TILA helps consumers make better-informed financial decisions, reflecting the law's broader purpose of promoting clear and honest communication in lending practices.