Why was the Truth in Lending Act passed?

The Truth in Lending Act (TILA) was passed primarily to ensure that consumers are informed about the terms and costs associated with borrowing money. Its main objective is to provide clear and comprehensible information regarding lending terms, thereby allowing consumers to make informed decisions. By mandating lenders to disclose key information such as interest rates, repayment terms, and total costs, the Act aims to prevent misleading practices and promote transparency within the lending process.

This focus on comprehensive disclosure is crucial for fostering a better understanding among borrowers, enabling them to compare various lending offers effectively and choose options that best fit their financial circumstances. The intent of TILA aligns with consumer protection principles, as it helps to mitigate confusion that can arise from complex financial products. This makes option B the most accurate answer regarding the purpose of the Truth in Lending Act.