What is the tolerance allowed for variances in the APR disclosure required by the Truth in Lending Act in a regular transaction?

The tolerance allowed for variances in the Annual Percentage Rate (APR) disclosure under the Truth in Lending Act for regular transactions is indeed .125%. This means that when a lender discloses the APR to a borrower, the actual APR must not vary from the disclosed APR by more than .125% for the disclosure to be considered accurate. This strict tolerance is in place to ensure consumers receive precise information about the cost of borrowing, allowing them to make informed decisions when comparing mortgage and loan products.

When evaluating the other options, the other figures are larger than the allowed tolerance, which does not meet the regulatory requirements set forth by the Truth in Lending Act. This specificity protects consumers from potential abuses and provides a clear standard that lenders must adhere to when providing disclosure.