What is the main purpose of the Consumer Credit Protection Act (Truth in Lending Act)?

The main purpose of the Consumer Credit Protection Act, commonly known as the Truth in Lending Act, is to ensure that borrowers are fully informed of the true cost of obtaining credit. This legislation mandates that lenders provide clear and concise information about credit terms, including interest rates, fees, and other costs associated with borrowing. By doing so, it enables consumers to make informed decisions when considering loans, ensuring a higher level of transparency in the lending process. This fostering of informed decision-making helps protect consumers from unexpected costs and encourages fair competition among lenders.

The other options, while related to consumer protection, do not capture the primary goal of the Truth in Lending Act. Enforcing maximum interest rates is not within the scope of this act; instead, it focuses on transparency. Although the act indirectly aids in reducing predatory lending practices by fostering a clearer understanding of loan terms, its core intention is not specifically to eliminate these practices or regulate foreclosure processes, but rather to ensure consumers are well-informed about the financial obligations they are undertaking.