What act requires lenders to inform borrowers of all costs of credit?

The Truth in Lending Act (TILA) is designed specifically to promote informed use of consumer credit by requiring disclosures about its terms and costs. This act mandates that lenders provide borrowers with clear and comprehensive information regarding the costs associated with borrowing, including interest rates, fees, and any other charges that may impact the total cost of credit. The primary goal of TILA is to help consumers understand the true cost of credit so that they can make informed decisions when entering into loan agreements.

While other acts exist to enhance consumer protection in the lending process—such as the Equal Credit Opportunity Act, which prohibits discrimination in lending, and the Fair Credit Reporting Act, which regulates how credit information is collected and used—none are specifically focused on the disclosure of credit costs like the Truth in Lending Act. The Consumer Credit Protection Act, on the other hand, encompasses TILA but does not serve as the sole act responsible for requiring lenders to disclose credit costs. Thus, the Truth in Lending Act is indeed the correct answer as it directly addresses the obligation of lenders to inform borrowers about all costs associated with credit.