Here is an interesting series of statements made a few years ago by a prominent regulator. See if you can guess who it is: Note, the answer is not Elizabeth Warren.
- Admit that we can’t throw a bunch of lawyers – however talented – into a room and expect that they are going to come up with consumer disclosures that are understandable to most people.
- I urge that we take a new approach, premised on obtaining input, through consumer testing, to learn what information consumers most want to know about, and how to most effectively convey it to them.
- The clear and concise labeling of food nutrition content has not only enabled consumers to find products with the nutritional characteristics they’re seeking, it has influenced food producers to develop products that consumers want. By this measure, the food nutrition disclosures have been effective and useful to consumers, whereas I doubt that we would make a similar statement about many of our current disclosures for consumer financial products.
The CFPB is going to spend a lot of time working to improve disclosures. I don’t remember who said it, but it is true: we live in a country where there are more efforts made to protect people from Happy Meals (TM) and children’s toys that on most of the products that make up the majority of our financial transactions.
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