Which act requires lenders to provide borrowers with disclosures regarding the cost of credit?

The Truth in Lending Act (TILA) is the correct answer because this federal law mandates that lenders provide borrowers with clear and comprehensive disclosures regarding the cost of credit. The purpose of TILA is to promote informed use of consumer credit by requiring disclosures about its terms and costs so that borrowers can make informed decisions. Key aspects of TILA include the requirement for lenders to disclose the annual percentage rate (APR), finance charges, total payments, and the total amount financed, among other pertinent information.

This transparency is crucial for borrowers as it allows them to understand the true cost of borrowing, compare different loan offers, and make better financial decisions. It is a foundational regulation in mortgage lending and consumer credit, ensuring that borrowers are not misled about the costs they are incurring.

The other acts listed, while related to housing and lending, have different primary focuses. The Equal Credit Opportunity Act mainly addresses discrimination in lending, the Fair Housing Act prohibits discrimination in housing based on certain protected classes, and the Real Estate Settlement Procedures Act pertains to the disclosure of closing costs and settlement procedures.