Consumers and Credit Disclosures: Credit Cards and Credit Insurance
- Topics:
- Commercial Lending
- Tags:
- Consumer Credit,
- Credit Card,
- Credit Insurance,
- Disclosure,
- FDIC,
- Marketing,
- Marketing Research,
- Survey
- Source:
- Federal Deposit Insurance Corp.
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Overview: This paper concludes that evaluating the direct effects of disclosure legislation like Truth in Lending on either consumer behavior or the functioning of the credit marketplace is never a simple matter because there are always competing explanations for observed phenomena. From consumer surveys over time, however, it seems likely that disclosures required by Truth in Lending have had a favorable effect on the ready availability of information on credit transactions. There are no corresponding measurements for the years before Truth in Lending, but it is difficult to imagine that two-thirds or more of credit users would have reported in those years that obtaining credit information was ‘‘somewhat easy’’ or ‘‘very easy.’’ Furthermore, the pricing information that consumers most often report they want is precisely the items the required disclosures emphasize. The surveys seem to indicate that most consumers have benefited from the ready availability of credit cost disclosures, but anecdotal reports that abusive practices still affect some consumers suggest the need for improvements in financial literacy and for appropriate enforcement efforts against remaining illegal practices. The relative consistency of responses to the lines of questioning in these surveys is heartening in that there does not seem to be evidence of a view that the credit information situation has worsened over time, despite more complicated consumer credit products and more widespread credit use.
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Format: PDF | Size: 77KB | Date: Jan 2003 | Pages: 13
