Which of the following is one of the four primary items disclosed to borrowers under TILA?

The correct answer is the finance charge, as this is one of the key disclosures mandated by the Truth in Lending Act (TILA). The finance charge represents the total cost of borrowing over the life of a loan, expressed as a dollar amount. This is a crucial piece of information for borrowers because it allows them to understand the total cost they will incur in addition to the principal amount borrowed.

By disclosing the finance charge, lenders help borrowers make informed decisions about their loans, as it provides a clear view of what the loan will ultimately cost, not just the interest rate. This aligns with TILA’s primary purpose, which is to promote informed borrowing by standardizing the presentation of credit terms.

While prepayment penalties, insurance requirements, and loan documentation fees are important considerations in the lending process, they do not hold the same level of significance in terms of mandatory disclosure under TILA as the finance charge does. TILA focuses on ensuring that borrowers are aware of the complete costs associated with their credit, and the finance charge is a central part of that requirement.