What law requires that finance charges be presented as an annual percentage rate?

The requirement for finance charges to be expressed as an annual percentage rate (APR) falls under the Truth in Lending Act. This law was enacted to promote informed use of consumer credit by requiring clear and standardized disclosures regarding the terms and costs associated with credit. By mandating that finance charges be presented as an APR, the Truth in Lending Act allows consumers to easily compare the cost of borrowing from different lenders, as the APR provides a comprehensive measure of the cost of credit expressed annually, including interest rates and certain fees.

In the context of real estate transactions and other lending scenarios, this transparency helps consumers make more informed decisions. It also protects consumers from misleading lending practices that may occur if costs were not clearly disclosed. Other laws mentioned, such as the Real Estate Settlement Procedures Act and the Fair Housing Act, serve different purposes and focus on areas like settlement procedures and non-discrimination in housing, respectively. The Dodd-Frank Act, while it introduced additional consumer protection measures and reforms in the financial sector following the 2008 financial crisis, does not specifically mandate the presentation of finance charges as an APR.