CBA Joint Comment Letter re Policy to Encourage Trial Disclosure Programs

 

Mr. Paul Watkins

Assistant Director, Office of Innovation

Bureau of Consumer Financial Protection

1700 G Street NW Washington, DC 20552

 

Re: Docket No. CFPB-2018-0023 – Policy to Encourage Trial Disclosure Programs

 

Dear Mr. Watkins:

 

The U.S. Chamber of Commerce,1 the American Bankers Association,2 and the Consumer Bankers Association3 appreciate the opportunity to comment on the proposal (Proposal)4 of the Bureau of Consumer Financial Protection (Bureau) to revise its “Policy to Encourage Trial Disclosure Programs” (2013 Policy).5 We share the Bureau’s goal of effectively encouraging trial disclosure programs and are pleased that the Bureau has proposed revisions to its policy.

 

While we appreciate the changes already reflected in the Proposal, we urge the Bureau to refine further its policy regarding trial disclosures in order to:

 

·    Abate risks to companies from participating in a trial disclosure program;

·    Ensure that the trial disclosure process is collaborative, fair, and transparent; and

·    Commit to changing relevant regulations when a trial disclosure proves effective.

 

   DISCLOSURE OVERVIEW

 

                Congress long has recognized the importance of empowering consumer choice through clear and understandable disclosures regarding consumer financial products and services. Likewise, our organizations have consistently supported regulatory approaches that ensure that consumers receive clear and concise disclosures about financial products. Such disclosures allow the consumer financial services marketplace to function efficiently by enabling consumers to determine which product would best meet their specific financial needs.

 

                However, no disclosure is perfect, no matter how well-conceived. A legally mandated disclosure may not convey the key features of an innovative product, or it may be too confusing for a consumer to understand. Alternatively, a business may have found a way to improve the content or format of a disclosure about an established product but may not be legally permitted to use the improved format. For example, a business may seek to modernize disclosures to facilitate review and consumer understanding through electronic disclosures available on smartphones and tablets. Electronic disclosures may allow the customer to access information more quickly and efficiently than through paper-based disclosures, such as by providing summary forms with links to additional information. However, regulatory mandates to use a particular format and delivery mechanism can make it very difficult for companies to ensure that disclosures convey the most useful information in the most accessible format—even when a company sees an opportunity to improve upon an existing disclosure.

 

                  Congress sought to address this challenge in Section 1032(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) when it authorized the Bureau to exempt individual companies from current disclosure requirements in order to test “trial disclosure programs.”7 The Bureau sought to encourage such programs in its 2013 Policy. As the Bureau now recognizes, however, that policy “failed to effectively encourage trial disclosure programs.”8 The Bureau consequently has not “permit[ted] such a program in the nearly five years since the Policy was issued.”

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