The federal agency in charge of helping consumers better protect their finances has tackled a number of issues that have been able to aid Americans, but it has also not taken its eye off one of its first priorities, which has yet to be fully worked out.
One of the first orders of business for the federal Consumer Financial Protection Bureau was to increase the amount and quality of borrower protections when it comes to dealing with credit cards, and perhaps one of the biggest keys for doing so was in introducing new disclosure forms for agreements on these accounts. And while in recent months, the CFPB has taken a number of steps to introduce more significant protections for other types of consumer credit, and a few of the industries based around lending, such as mortgage servicing, the agency recently reaffirmed its commitment to clearer credit card disclosures, according to a report from Dow Jones Newswires.
Soon after gaining full regulatory control of the lending industry, the CFPB released an early version of a planned simpler credit card agreement disclosure form which laid out the terms of the new card in clear language for a potential borrower to understand, the report said. And while it did not make use of this form mandatory, it will soon test the form with the Pentagon Federal Credit Union to get feedback from the lender on the viability of such a disclosure going forward.
"My view continues to be that the consumer ought to be able to read the contract and we can … create a document that is [binding]," said Marla Blow, assistant director of card markets for the Consumer Financial Protection Bureau, during a recent presentation, according to the news agency. "I'd love to get to a first-order outcome, which is a better, more legible, more understandable document that is actually in terms a consumer can understand and still offer legal protections, and addresses the concerns of the issuer."
Pushback from lenders
Perhaps understandably, the credit card lending industry has not been enthusiastic about the prospect of making these disclosure forms for their various lines of credit, and has suggested to the CFPB a number of alternative options, the report said. For instance, the CFPB's disclosure forms do not include certain legal responsibilities lenders might have to their borrowers, which they say makes them more vulnerable to lawsuits from consumers disputing their statements.
When applying for any credit card, consumers should first make sure to order copies of their credit reports to determine that their credit standings are as good as they should be. Often, there can be unfair markings on their credit reports that lower their ratings and cut off access to the lines of credit they may otherwise deserve. Working with a credit repair company can help to clear up these problematic entries.