What common practice is associated with the Truth in Lending Act?

The Truth in Lending Act (TILA) is primarily designed to promote the informed use of consumer credit by requiring clear disclosure of key terms of the lending arrangement. This includes details such as the annual percentage rate (APR), terms of the loan, and any fees associated with the loan. By mandating these disclosures, TILA ensures that borrowers can compare credit terms from different lenders more effectively and make informed financial decisions regarding their commitments. This practice safeguards consumer rights and enhances transparency in lending, helping to prevent misunderstandings and potential financial distress.

The other options suggest practices that would be contrary to the principles of TILA. Encouraging predatory lending undermines consumer protection, billing for hidden fees would violate disclosure requirements, and providing loans without any terms would negate the need for clear explanations of the credit agreement, which TILA explicitly requires.