Which of the following transactions falls under the protection of Reg Z?

Which of the following transactions falls under the protection of Reg Z?

• A. A loan taken out to consolidate credit card debt
• B. A loan for business expansion
• C. A personal loan for home repairs
• D. A family loan between relatives

Answer: (C)

The correct choice is a personal loan for home repairs because it typically involves credit extended to a consumer for personal, family, or household purposes, which falls under the protections provided by Regulation Z (Truth in Lending Act). Regulation Z is designed to promote informed use of credit by requiring clear disclosure of terms and costs, primarily aimed at protecting consumers in their borrowing activities. Regulation Z applies specifically to consumer loans and does not extend to business loans, as business expansion loans are meant for commercial purposes, which are excluded from the regulation's protective measures. Likewise, a family loan between relatives generally does not qualify because it is typically not considered a consumer transaction under Regulation Z; these types of loans often lack the formalized credit terms that Regulation Z is designed to regulate. Although a loan taken out to consolidate credit card debt may also be subject to Regulation Z due to its consumer nature, the primary focus here is the context of home repairs, which explicitly ties into the Act's consumer borrowing protections.

The correct choice is a personal loan for home repairs because it typically involves credit extended to a consumer for personal, family, or household purposes, which falls under the protections provided by Regulation Z (Truth in Lending Act). Regulation Z is designed to promote informed use of credit by requiring clear disclosure of terms and costs, primarily aimed at protecting consumers in their borrowing activities.

Regulation Z applies specifically to consumer loans and does not extend to business loans, as business expansion loans are meant for commercial purposes, which are excluded from the regulation's protective measures. Likewise, a family loan between relatives generally does not qualify because it is typically not considered a consumer transaction under Regulation Z; these types of loans often lack the formalized credit terms that Regulation Z is designed to regulate. Although a loan taken out to consolidate credit card debt may also be subject to Regulation Z due to its consumer nature, the primary focus here is the context of home repairs, which explicitly ties into the Act's consumer borrowing protections.