Which act aims to ensure that consumers know the terms and conditions of credit before they commit?

The Truth in Lending Act (TILA) is designed specifically to ensure that consumers are fully informed about the terms and conditions associated with credit. This Act requires lenders to provide clear and conspicuous disclosures regarding the cost of borrowing, including the annual percentage rate (APR), finance charges, and the total amount financed. The goal is to promote informed use of credit by requiring standardized information that consumers can understand and compare when making borrowing decisions.

By mandating these disclosures, TILA helps protect consumers from deceptive lending practices. It facilitates transparency in lending, prompting financial institutions to communicate the essential terms of credit transactions effectively. As a result, consumers can make more informed decisions regarding their borrowing options.

In contrast, the other acts listed do not focus on consumer credit terms. The Home Mortgage Disclosure Act (HMDA) deals with collecting and reporting information related to mortgage loans to help identify patterns of discrimination. The Fair Housing Act prohibits discrimination in housing-related transactions, and the Right to Financial Privacy Act provides individuals with privacy regarding their financial records held by financial institutions. Each of these acts serves distinct purposes that do not directly address the clarity of credit terms like TILA does.