What law protects consumers against predatory lending practices?

The Truth-in-Lending Act is the law that primarily protects consumers against predatory lending practices. This act requires lenders to provide clear and conspicuous information about the terms and costs of loans, ensuring that consumers fully understand what they are agreeing to when they take out a mortgage. The key features of the act include disclosing the annual percentage rate (APR), payment schedules, and the total cost of borrowing over the life of a loan.

By mandating these disclosures, the Truth-in-Lending Act empowers consumers to make informed decisions about their borrowing options and to compare different loan offers effectively. This transparency helps to reduce the risk of exploitation by lenders who might otherwise engage in deceptive or unfair practices, which is a central concern of predatory lending.

In contrast, other laws listed focus on different aspects of lending and consumer protection but do not specifically address the prevention of predatory lending. For instance, the Homeowner's Protection Act relates primarily to private mortgage insurance; the Equal Credit Opportunity Act prohibits discrimination in lending but does not detail loan cost disclosures; and the Real Estate Settlement Procedures Act regulates the settlement process but does not focus specifically on lending terms.