The American Bankers Association recently criticized the Consumer Financial Protection Bureau’s plan to survey one credit union’s new short-form credit card agreement and its existing long-form agreement, saying that the agency should refocus its efforts.
The CFPB, which has been working to simplify mortgage disclosures and credit card agreements, is seeking to conduct the survey in order to determine whether consumers are likely to read the agreement, as well as gauge consumer understanding and whether consumers find the information contained within the agreement to be meaningful.
The ABA said that the agency’s plan would yield “little if any useful information” in measuring consumer willingness to read credit agreements and consumer knowledge and understanding of those agreements.
“The bureau itself acknowledges that the information gathered ‘will not be treated as statistically generalizable data,’” the ABA said in the comment letter. “That the information gathered cannot be extrapolated to either the general population or to other credit card agreements raises questions about the value of the proposed exercise.”
In December, the CFPB proposed a prototype credit card agreement that included two pages of key terms, a one page summary of those terms and eight pages of definitions available online.
The CFPB is currently requesting “emergency processing and approval of” the agency’s plan to collect data from the Office of Management and Budget.
“We recommend that the bureau instead focus its resources on qualitative research that examines what information related to their credit card consumers believe they need and find useful and the best means of delivering that information so that consumers notice and understand that information,” the ABA said. “Furthermore, we believe that the bureau’s hyperbole that this particular survey should receive ‘emergency’ clearance because it is ‘essential’ to its mission should be rejected and the standard information collection process should apply.”
The ABA also urged the CFPB to build upon existing one page agreements and to form new disclosures based on “sound, meaningful data that can withstand scrutiny and peer review.”
“For all these reasons and for the lack of any factual demonstration that ‘emergency’ clearance is warranted because of the ‘essential’ nature of this particular survey to the mission of the agency, we ask that clearance of this information collection be denied in its current form,” the ABA said.