Which federal law requires lenders to reveal the true costs of credit, including total interest and monthly payments?

The Truth in Lending Act (TILA) is the federal law that mandates lenders to disclose the true costs of credit. This includes important information such as the total interest cost over the life of a loan, as well as the monthly payments that borrowers will be obligated to make. This transparency is crucial for borrowers to make informed decisions regarding credit, as it prevents lenders from obscuring costs and terms that could lead to financial hardship.

TILA aims to promote informed use of consumer credit by ensuring clear and concise information about the terms of the credit, thus enabling consumers to compare different loan offers more effectively. By requiring lenders to provide standardized information, TILA enhances consumer protection in the financial marketplace.

The other laws mentioned, while important, serve different purposes. For instance, the Consumer Protection Act covers a broad range of consumer rights, the Fair Credit Reporting Act focuses on the accuracy and privacy of information in consumer credit reports, and the Equal Credit Opportunity Act prohibits discrimination in credit lending. None of these laws specifically target the disclosure of credit costs as directly as the Truth in Lending Act does.