Pentagon Federal Credit Union will test drive a new credit card disclosure form developed by the Consumer Finance Protection Bureau, officials announced this month. Acting CFPB director Raj Date told reporters at a Cleveland press conference that PenFed, one of the nation's largest credit unions, had agreed to share the CFPB-formatted terms and conditions document with new credit card applicants in early 2012.
The CFPB posted a sample credit card disclosure form to its website in early December. Credit card companies last faced lawmaker pressure to change their marketing practices in 2000, when then-congressman Charles Schumer sponsored legislation to make lenders use a consistent design for displaying account rates and fees. While the so-called "Schumer Box" remains a required element of credit card applications, banks may opt in to using the CFPB format in customer-facing communication.
Banks under pressure to streamline credit card, checking agreements
Credit card users aren't the only Americans who can expect to see clearer disclosure from banks in the new year. Officials from J.P. Morgan Chase & Co. announced that they would eliminate some unpopular checking account fees for many customers. To highlight the transition, new Chase checking account applications will now include a streamlined fee disclosure form designed by researchers from the nonprofit Pew Health Group.
Like the CFPB's credit card form, Pew's documentation reduces the typical banking boilerplate to a single sheet that explains rates, fees and penalties in clear English. According to a Dow Jones Newswires report, PenFed and the North Carolina State Employees' Credit Union will join Chase in rolling out the new form during 2012.
Although disclosure forms aren't mandated by federal financial laws, consumer advocates like Ira Rheingold feel that competitive pressure may force more banks into simplifying their terms and conditions. The spokesman for the National Association of Consumer Advocates told ABC News that banks earn more business when they make it easy for prospective customers to compare credit cards.