How many triggering terms must be used before a bank is required to provide all of the additional disclosures?

How many triggering terms must be used before a bank is required to provide all of the additional disclosures?

• A. A. 1
• B. B. 2
• C. C. 3
• D. D. 4

Answer: (A)

The correct choice reflects the fact that even a single triggering term can require a bank to provide additional disclosures as mandated by Regulation Z under the Truth in Lending Act. Triggering terms include specific language relating to the credit offered, such as the amount of credit, payment terms, interest rates, and others. When a lender includes even one of these triggering terms in their advertisement or offer, they must provide the consumer with a comprehensive set of disclosures, ensuring that the consumer has all the necessary information to make an informed decision regarding the credit being offered. This requirement emphasizes consumer protection by ensuring transparency in lending practices, thus addressing potential issues of miscommunication or misunderstanding about the terms of credit. Since one triggering term can initiate the need for further disclosures, it makes it crucial for lenders to be mindful of their language in marketing materials.

The correct choice reflects the fact that even a single triggering term can require a bank to provide additional disclosures as mandated by Regulation Z under the Truth in Lending Act. Triggering terms include specific language relating to the credit offered, such as the amount of credit, payment terms, interest rates, and others. When a lender includes even one of these triggering terms in their advertisement or offer, they must provide the consumer with a comprehensive set of disclosures, ensuring that the consumer has all the necessary information to make an informed decision regarding the credit being offered.

This requirement emphasizes consumer protection by ensuring transparency in lending practices, thus addressing potential issues of miscommunication or misunderstanding about the terms of credit. Since one triggering term can initiate the need for further disclosures, it makes it crucial for lenders to be mindful of their language in marketing materials.