Which laws are cited as helping to avoid predatory lending in the underwriting process?

• A. TILA, RESPA, and fair lending laws with thorough disclosures
• B. ADA and HIPAA
• C. FCRA and GDPR
• D. COPPA

Answer: (A)

Underwriting safety against predatory lending relies on clear, standardized disclosures and protections that prevent abusive or discriminatory terms. The Truth in Lending Act requires lenders to disclose the true cost of credit, including the annual percentage rate, finance charges, and payment terms, so borrowers can compare offers and spot misleading terms. Real Estate Settlement Procedures Act mandates upfront disclosure of settlement costs and prohibits kickbacks and certain practices that can hide fees, reducing the chance of hidden charges or steering. Fair lending laws, such as those enforcing non-discrimination in lending, ensure borrowers aren’t treated unfairly based on protected characteristics and that disclosures are used to promote fair, transparent terms. Together, these laws create transparency in the underwriting process and help prevent predatory lending.

Other options don’t directly target underwriting protections against predatory practices: ADA and HIPAA relate to accessibility and health information privacy, FCRA and GDPR concern data privacy and credit reporting respectively but aren’t focused on stopping predatory underwriting, and COPPA covers children’s online privacy.