Which act requires lenders to disclose the true costs of credit to borrowers?

The Truth in Lending Act (TILA) is fundamental in promoting informed use of consumer credit by requiring clear disclosure of credit terms. This legislation mandates that lenders provide borrowers with all pertinent information regarding the true costs associated with a loan, including interest rates, fees, and other charges. This transparency enables borrowers to make educated decisions when comparing different loan offers, thereby fostering a more competitive lending environment.

The other acts mentioned serve different purposes. For instance, the Real Estate Settlement Procedures Act (RESPA) focuses on processes related to real estate transactions and mandates disclosures related to the costs of settlement services, but not specifically the overall costs of credit. The Fair Housing Act addresses discrimination in housing-related transactions, while the Home Mortgage Disclosure Act (HMDA) requires financial institutions to provide data on mortgage lending, but it does not specifically require disclosures about the costs of credit to borrowers.