Affiliate Broker Tennessee (TN PSI) National Practice Exam `

Which statement would NOT trigger full disclosure under TILA according to Jerome's ad?

1. Get a low 4.925% APR

2. Loans for more than 5 years

3. Monthly payment obligations

4. Term of the loan

The correct answer is: Get a low 4.925% APR

The correct choice reflects that the statement "Get a low 4.925% APR" does not necessitate full disclosure under the Truth in Lending Act (TILA). TILA is designed to promote informed consumer choice by requiring lenders to disclose certain information clearly and prominently to borrowers. Full disclosure under TILA typically comes into play when specific advertising terms could mislead or confuse consumers, particularly when they concern key factors like the loan amount, interest rates, payment terms, and the total cost of credit. The first statement offers only the annual percentage rate (APR) without any additional context or qualifying information related to loans. In contrast, the other statements—monthly payment obligations, loans for more than five years, and the term of the loan—are associated with specific aspects of a loan that consumers must understand fully, and thus fall under the purview of TILA's full disclosure requirements. These details are essential for potential borrowers and can significantly impact their financial decisions. In summary, since the APR by itself is just a rate and does not include terms that could lead to misunderstandings regarding the overall cost or repayment obligations, it does not trigger the same level of disclosure as the other statements do.