What must a lender disclose when making an affiliated business arrangement?

In an affiliated business arrangement, transparency is essential to ensure that consumers are aware of any potential conflicts of interest that may arise. When a lender is involved in such an arrangement, it is crucial for them to disclose their interest in the referral. This is to inform the borrower that the lender may benefit financially from the business they refer. Such a disclosure is mandated to ensure that consumers can make informed decisions based on any affiliations that could influence the lender's recommendations or advice.

This requirement helps to maintain trust in the lending process and protects consumers from potential exploitation due to undisclosed financial relationships. By knowing that the lender has a vested interest in the referral, borrowers can weigh their options more carefully.

The other choices do not address the specific necessity of disclosing the lender's interest in the referral, which is the core requirement of affiliated business arrangements.