PSI Oklahoma Real Estate Practice Test

Which of the following advertising statements is considered acceptable under Truth-in-Lending?

1. Stating incorrect interest rates

2. Creating misleading promotional offers

3. Disclaiming any fees associated with loans

4. Offering clear disclosure of terms

The correct answer is: Offering clear disclosure of terms

The most suitable response under Truth-in-Lending standards is the option that emphasizes offering clear disclosure of terms. Truth-in-Lending regulations are designed to protect consumers by ensuring that they receive accurate and comprehensive information about the costs associated with credit. This includes the obligation to disclose the annual percentage rate (APR), loan terms, and any fees that may be incurred. Providing clear disclosures allows consumers to make informed decisions by understanding the complete cost of borrowing. This transparency fosters trust in the lending process and ensures compliance with legal requirements. When lenders are upfront about the terms of a loan, they help eliminate misunderstandings and potential deceptive practices, aligning with the fundamental principles of Truth-in-Lending. In contrast, stating incorrect interest rates, creating misleading promotional offers, and disclaiming fees would violate these regulations, as they can lead to consumer deception and financial harm. These practices fail to meet the standards of transparency that Truth-in-Lending aims to uphold, underscoring the importance of clear communication in advertising.