Which act requires lenders to disclose the cost of credit to consumers?

The Truth in Lending Act (TILA) is the legislation that mandates lenders to disclose the cost of credit to consumers. This act ensures that consumers are fully informed about the terms and costs associated with borrowing money. Under TILA, lenders must provide clear and understandable information regarding the annual percentage rate (APR), finance charges, and payment schedules. This transparency helps consumers to better compare credit offers from different lenders and make informed financial decisions.

Other acts mentioned serve different purposes: the Community Reinvestment Act focuses on encouraging financial institutions to meet the needs of the communities in which they operate, particularly low- and moderate-income neighborhoods; the Equal Credit Opportunity Act prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance; and the Real Estate Settlement Procedures Act aims to provide consumers with pertinent information regarding the cost of the settlement process in real estate transactions. Each of these acts addresses specific aspects of lending and consumer rights, but it is TILA that specifically requires the disclosure of credit costs.