Under TILA, what is one of the requirements for lenders regarding disclosures?

Under the Truth in Lending Act (TILA), lenders are required to provide clear and transparent information about the costs of credit to borrowers. One of the fundamental requirements is that disclosures must be included in the loan application or agreement. This ensures that borrowers are aware of the terms and conditions of the loan, including interest rates, fees, and other costs associated with borrowing. The goal is to promote informed borrowing decisions by making sure that borrowers have access to all necessary information prior to agreeing to the loan.

The inclusion of disclosures in the loan application or agreement is crucial as it helps to prevent any misunderstandings regarding the financial obligation being undertaken. This practice is an integral part of consumer protection and fosters trust in the lending process. It does not suffice to rely solely on verbal communication, as written disclosures provide a tangible reference for borrowers to review.

In contrast, other options do not fulfill the requirements set forth by TILA, such as limiting information to certain borrowers or when dealing with smaller loans. This strict requirement on disclosures applies universally, regardless of the size of the loan or the creditworthiness of the borrower.