American Association of Family and Consumer Sciences (AAFCS) Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the American Association of Family and Consumer Sciences Test. Study with flashcards and multiple choice questions, each question includes hints and explanations. Get ready for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

The Truth in Lending Act requires organizations to disclose what?

The full terms and costs of a lending agreement
The maximum amount they can lend to consumers
The interest rates for various credit options
The penalties for late payments

The correct answer is: The full terms and costs of a lending agreement

The Truth in Lending Act (TILA) is designed to promote informed use of consumer credit by requiring disclosures about its terms and costs. The primary focus of TILA is to ensure that consumers understand the full cost of borrowing, which includes not only the interest rates but also other fees, terms, and conditions associated with a lending agreement. By mandating this disclosure, TILA helps consumers make informed decisions by providing them with comprehensive information that compares different credit options and allows for a clearer understanding of their financial obligations. While other aspects mentioned, such as late payment penalties, may be relevant to a borrowing scenario, TILA specifically emphasizes the entire scope of the lending agreement to ensure transparency and protect consumers from hidden costs. This is why the answer regarding the requirement for disclosing the full terms and costs of a lending agreement is accurate.