Maryland Home Improvement PSI Practice Exam

Federal Truth-in-Lending laws are also known as what?

1. The Freedom of Information Act.

2. The Equal Credit Opportunity Act.

3. Regulation Z.

4. Title VIII.

The correct answer is: Regulation Z.

Federal Truth-in-Lending laws are commonly referred to as Regulation Z. This regulation implements the Truth in Lending Act (TILA), which was enacted to promote informed use of consumer credit by requiring disclosures about its terms and cost. Regulation Z mandates that lenders provide clear and standardized information to borrowers about loan terms, associated costs, and the annual percentage rate (APR), allowing consumers to make more informed comparisons between different credit options. This transparency is vital for protecting consumers from deceptive lending practices and ensuring that they can fully understand the financial obligations they are entering into. The other choices relate to different areas of law. The Freedom of Information Act pertains to the public's right to access information held by the government. The Equal Credit Opportunity Act prevents discrimination in lending based on race, color, religion, national origin, sex, marital status, or age. Title VIII refers to the Fair Housing Act, which prohibits discrimination in housing. Each of these laws addresses important issues but is not synonymous with the Truth-in-Lending laws, which are specifically defined under Regulation Z.