Housing and Community Development (HCD) Practice Exam

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What does the term "Regulation Z" relate to?

Registration and titling procedures of the Housing Department
Regulations concerning maximum interest rates and finance charges
Interpretations by HCD regarding Regulation Z
Regulations of the Federal Reserve System under Truth in Lending Act

The correct answer is: Regulations of the Federal Reserve System under Truth in Lending Act

The term "Regulation Z" pertains specifically to the regulatory framework established under the Truth in Lending Act (TILA). The primary objective of Regulation Z is to ensure that consumers are provided with clear and comprehensible information about the terms and costs associated with credit. This includes requirements for disclosure of interest rates, finance charges, and other relevant charges that may affect a consumer's financial decisions. Regulation Z mandates that lenders provide borrowers with detailed information about credit terms before they enter into a credit agreement, which helps in promoting transparency and preventing deceptive lending practices. The Federal Reserve System originally issued Regulation Z, which is now enforced by the Consumer Financial Protection Bureau (CFPB) since its establishment. Understanding this regulation is critical for those involved in housing and community development, as it plays a significant role in consumer protection and can influence mortgage lending practices, thereby impacting affordability and access to housing.