Which federal act aims to protect consumers from predatory lending practices?

The Home Ownership and Equity Protection Act (HOEPA) is specifically designed to protect consumers from predatory lending practices, particularly those associated with high-cost mortgage loans. It addresses issues that arise from loan terms that can exploit vulnerable borrowers, ensuring that borrowers receive certain consumer protections and disclosures about the terms of their loans.

HOEPA establishes requirements for lenders regarding the disclosure of loan terms, interest rates, and fees, as well as establishing certain restrictions to prevent abusive practices. For example, it mandates that lenders provide borrowers with a written notice which outlines the potential risks associated with the loans and ensures that they understand the financial implications before proceeding.

While acts like the Truth in Lending Act provide important consumer protections by requiring clear disclosure of important loan information and the Equal Credit Opportunity Act prohibits discrimination in lending, HOEPA is focused specifically on preventing predatory lending tactics that can lead to borrower exploitation. The Fair Housing Act, on the other hand, addresses discrimination in housing-related transactions. Therefore, HOEPA's emphasis on high-cost loans and its accompanying protections distinctly position it as the federal act aimed at combating predatory lending practices.