Which of the following laws prohibits unfair and abusive credit practices and ensures that credit fees are transparent to consumers?

• A. Foreign Corrupt Practices Act (FCPA)
• B. Truth in Lending Act (TILA)
• C. Dodd-Frank Wall Street Reform and Consumer Protection Act
• D. Sarbanes-Oxley Act (SOX)

Answer: (B)

Verified step by step guidance

1. Understand the context of the question: It is asking about a law that prohibits unfair and abusive credit practices and ensures transparency in credit fees for consumers. This relates to consumer protection in financial transactions.
2. Review the provided options: Foreign Corrupt Practices Act (FCPA), Truth in Lending Act (TILA), Dodd-Frank Wall Street Reform and Consumer Protection Act, and Sarbanes-Oxley Act (SOX). Each of these laws has a specific purpose, so identifying the correct one requires understanding their scope.
3. Analyze the Truth in Lending Act (TILA): This law is specifically designed to ensure that consumers are informed about the terms and costs of credit. It mandates clear disclosure of credit fees and prohibits abusive practices, making it relevant to the question.
4. Consider the other options: The Foreign Corrupt Practices Act (FCPA) deals with anti-bribery and accounting transparency in international business. The Dodd-Frank Act focuses on financial regulation and systemic risk, while the Sarbanes-Oxley Act (SOX) addresses corporate governance and financial reporting. None of these directly address consumer credit practices.
5. Conclude that the Truth in Lending Act (TILA) is the correct answer based on its focus on consumer credit protection and transparency in fees.