The act limited balloon payments in consumer leases and enabled consumers to compare lease terms with credit terms where appropriate. The act was implemented by Regulation M (Consumer Leasing). It requires disclosures to consumers before consummation of the lease agreement. This act is:
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A. B. C. D.A
The act described in the question that limited balloon payments in consumer leases and mandated disclosures to consumers before consummation of lease agreements is the Consumer Leasing Act (CLA).
The CLA was enacted in 1976 and is a federal law that provides protection to consumers who lease personal property. Its purpose is to ensure that consumers receive meaningful and accurate disclosures about the terms and costs of consumer leases.
To implement the CLA, the Federal Reserve Board issued Regulation M (Consumer Leasing), which sets forth the specific requirements for disclosures that lessors must make to consumers before a lease agreement is consummated.
The disclosures required by Regulation M must be made clearly and conspicuously, in a form that the consumer can keep. They must include information about the total amount due under the lease, the number and amount of payments, and any fees or charges associated with the lease.
One important aspect of the CLA is that it requires lessors to disclose the total amount due under the lease, including all payments and fees, as well as the annual percentage rate (APR) of the lease. This enables consumers to compare the cost of leasing with the cost of credit where appropriate.
In addition to requiring disclosures, the CLA limits the use of certain lease terms that may be unfavorable to consumers. For example, it limits the use of balloon payments, which are large lump-sum payments due at the end of a lease term.
To summarize, the act described in the question is the Consumer Leasing Act, which is implemented by Regulation M. The CLA provides protection to consumers who lease personal property by requiring lessors to make meaningful and accurate disclosures about the terms and costs of consumer leases, and by limiting the use of certain lease terms that may be unfavorable to consumers.