20. According to the Truth-in-Lending Act (Regulation Z), which of the following must be stated in the Truth-in-Lending disclosure?
Answer: D
Annual percentage rate must be stated in the Truth-in-Lending disclosure.
The Truth-in-Lending Act (Regulation Z) requires that the annual percentage rate (APR) be disclosed to borrowers, as it provides a clear and comprehensive understanding of the costs associated with borrowing.
A) attorney fees
Attorney fees are not mandated to be disclosed under the Truth-in-Lending Act. While they may be relevant to the overall cost of a loan transaction, they do not fall under the specific requirements of Regulation Z for disclosures.
B) cost of title policy
The cost of a title policy is not a required element in the Truth-in-Lending disclosure. Although it can be an important cost in real estate transactions, it is not specified as necessary information under Regulation Z.
C) broker's commission
Broker's commission is also not required to be disclosed by the Truth-in-Lending Act. This fee, while potentially significant in a real estate transaction, does not fall within the scope of Regulation Z disclosures.
D) annual percentage rate
The annual percentage rate (APR) is explicitly required by the Truth-in-Lending Act to be disclosed. The APR is crucial as it reflects the cost of borrowing on an annual basis, allowing consumers to compare different loan offers effectively.
Conclusion
The annual percentage rate is a critical component that must be included in the Truth-in-Lending disclosure according to Regulation Z, ensuring borrowers are fully informed of the cost of credit. The other options, including attorney fees, cost of title policy, and broker's commission, are not required disclosures, highlighting the specific focus of the regulation on the APR as a key indicator of loan costs.