Which federal law ensures that consumers receive clear information about mortgage terms?

The Truth in Lending Act (TILA) is the federal law that ensures consumers receive clear information about mortgage terms. This act was designed to promote informed use of consumer credit by requiring disclosures about its terms and costs. Under TILA, lenders must provide borrowers with detailed information regarding interest rates, loan fees, and other terms associated with mortgages. This transparency helps consumers make better-informed financial decisions when choosing a mortgage product, ensuring they understand the total cost of borrowing and the obligations involved.

In contrast, the Equal Credit Opportunity Act focuses on preventing discrimination in lending practices, ensuring that credit is available to all individuals regardless of race, color, religion, or other characteristics. The Real Estate Settlement Procedures Act aims to protect consumers by requiring clear disclosures concerning settlement costs, but it does not primarily focus on the mortgage terms themselves. The Dodd-Frank Act, while encompassing multiple financial reforms, is broader in scope and includes provisions related to mortgage reform, but TILA specifically targets the consumers' understanding of credit terms. Thus, TILA is the correct choice as it directly addresses the need for clear information regarding mortgage terms.