Consumer Financial Protection Bureau

UPDATE: Staff at the Consumer Financial Protection Bureau informed ALTA that its trial disclosure program is not intended to be used for the RESPA-TILA disclosures, rather it is part of a larger effort to develop or revamp financial disclosures like credit card and student loan disclosures.

On Dec. 13, the Consumer Financial Protection Bureau (CFPB) on Dec. 13 proposed to allow companies to test new consumer disclosures on a case-by-case basis.

The program encourages companies to propose and conduct trial disclosure programs. Richard Cordray, director of the CFPB, said the goal is to help the Bureau “identify what works and does not work to provide consumers with the clear information they need to make financial decisions in a marketplace of evolving programs and products.”

Under the proposed trial disclosure policy, the Bureau would approve individual companies, on a case-by-case basis, for limited time exemptions from current federal disclosure laws in order for those companies to research and test informative, cost-effective disclosures. The companies involved will then share the results of their trial disclosure with the CFPB. The CFPB will use that information to improve its disclosure rules and model forms. The public will have input through the rulemaking process. 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.