What is the primary purpose of Regulation Z?

The primary purpose of Regulation Z is to ensure transparency in loan terms. This regulation, which is part of the Truth in Lending Act (TILA), aims to provide consumers with clear and accurate information about the costs associated with borrowing. By requiring lenders to disclose key details such as the annual percentage rate (APR), terms of the loan, and any associated fees, Regulation Z enables consumers to make informed decisions when comparing credit offers. This transparency helps consumers understand the true cost of credit and promotes fair lending practices.

In contrast, expanding access to credit and regulating interest rates are not the main focuses of Regulation Z. While the regulation indirectly contributes to fair lending practices by fostering informed decision-making, it does not specifically aim to broaden credit accessibility. Likewise, it does not set interest rates; instead, it ensures borrowers are fully aware of what they will be paying over the life of the loan. Lastly, governing real estate transactions is outside the scope of Regulation Z. It pertains specifically to consumer credit and lending practices rather than broader real estate regulations.