Which risk tiers require notice for less favorable terms?

The correct answer indicates that for four or fewer risk tiers, notice is required when offering less favorable terms for risk categories B, C, and D. This means that for these specific tiers, lenders must provide clear documentation to borrowers when their loan terms are less favorable than others, ensuring transparency and compliance with regulatory requirements.

In scenarios with fewer risk tiers, the closer examination of terms is crucial as the potential for varied terms and disclosures can impact borrowers significantly. By enforcing notice for these middle and lower risk tiers, the system aims to protect consumers from unexpected financial burdens and enhances fairness in lending practices.

The context surrounding the other options shows that they either involve more risk tiers or suggest notices for different categories, which do not align with the established regulatory guidelines concerning disclosures and borrower awareness in lending practices. This distinction emphasizes the importance of clearly communicating loan conditions based on risk assessments, particularly in formats with fewer classifications, thereby promoting a more equitable lending environment.