NMLS Uniform State Test (UST) Mortgage Practice Exam

Question: 1 / 400

Under which act are creditors required to disclose the APR to consumers?

The Fair Credit Reporting Act

The Truth in Lending Act

The Truth in Lending Act (TILA) is the legislation that requires creditors to disclose the Annual Percentage Rate (APR) to consumers. This disclosure is crucial because it allows consumers to understand the cost of borrowing in a standardized way. TILA was established to promote informed use of consumer credit by requiring clear and conspicuous disclosure of credit terms, including the APR, which represents the total yearly cost of borrowing expressed as a percentage, encompassing the interest rate as well as any additional costs or fees associated with the loan.

The need for such transparency is essential as it enables consumers to compare different lending offers and make informed decisions about loans. The requirement sets a consumer protection standard aimed at preventing deceptive lending practices and ensuring that borrowers are well-informed about the financial obligations they are undertaking.

Get further explanation with Examzify DeepDiveBeta

The Equal Credit Opportunity Act

The Home Mortgage Disclosure Act

Next Question

Report this question

Download NMLS Uniform State Test (UST) Mortgage Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy