Which law promotes informed shopping by requiring the disclosure of settlement services to the borrower?

The correct answer is C, which is the Real Estate Settlement Procedures Act (RESPA). RESPA was enacted to provide consumers with a clearer understanding of the costs associated with closing a real estate transaction. One of its key objectives is to ensure that borrowers receive detailed disclosures regarding settlement services. This is done to promote transparency and informed decision-making, allowing consumers to shop for services, compare costs, and understand their rights during the settlement process.

RESPA requires lenders to provide a good faith estimate of closing costs, which outlines the services provided and the fees associated with them. This helps consumers avoid surprise charges and enables them to make better financial decisions by comparing offers from different providers.

In contrast, other options relate to different aspects of financial regulation. Regulation C pertains primarily to the Home Mortgage Disclosure Act (HMDA), which focuses on lending patterns to ensure fair lending practices but does not specifically address the disclosure of settlement services. Regulation B deals with the Equal Credit Opportunity Act (ECOA) and aims to eliminate discriminatory lending practices, while the Truth in Lending Act (TILA) focuses on disclosure of credit terms to protect borrowers by ensuring they understand the cost of borrowing. Each of these laws has important functions but does not specifically target the disclosure of settlement services