CFPB Announces Proposed Policy for Letting Companies Test Disclosure Programs

by Jeff Sovern

Here.  The idea is that a company can apply to the Bureau for permission to try different disclosures and the disclosures can then be evaluated, and perhaps adopted.  In its statement announcing the proposal, the Bureau says:

When deciding whether or not to grant a company a waiver from current disclosure requirements,
the Bureau proposed policy would evaluate a number of factors including:

 Consumer Understanding: The Bureau will assess how effectively and efficiently the proposed trial will test for potential improvements to consumer understanding about the costs, benefits, and risks of products and services.

 Cost Effectiveness: The Bureau will evaluate how the proposed trial will help develop more cost-effective disclosure rules or policies.

 Minimizing Consumer Risk: The Bureau will evaluate the extent to which the program is designed to mitigate any risk to consumers.

It sounds like a good idea. After all, the companies who deal with consumers directly may know things the Bureau doesn't about how and what to tell consumers.  But I wish that the Bureau included in its evaluation criteria that it will also assess whether consumers use the disclosures.  Disclosures that clearly convey information but are ignored do consumers little good, and we've had far too many of those (does anyone really know the differnce between a full warranty and a limited warranty under the federal Magnuson-Moss Warranty Act, for example?).  Maybe that's implicit in testing for consumer understanding, but I would rather see it made explicit. 

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