Finance
The Truth-in-Lending Act (TILA) requires lenders to disclose the Annual Percentage Rate (APR) because the APR:
AIs always lower than the stated interest rate
BRepresents the true cost of credit including fees and charges✓ Correct
CIs set by the Federal Reserve
DOnly applies to commercial loans over $500,000
Explanation
The APR includes the interest rate plus all other loan costs (origination fees, discount points, mortgage insurance, etc.) expressed as an annual rate, giving borrowers a true comparison of loan costs.
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