by Broderick Perkins
DeadlineNews.Com
(12/12/2011) - The U.S. Consumer Financial Protection Bureau (CFPB) recently rolled out a plain-English credit card agreement prototype designed to simplify the credit card agreement you trigger when you first use your card.
CFPB's prototype reduces to two pages what is typically found in four pages of disclosures from credit card issuers, but that's because many of the terms on the online prototype are linked to fuller descriptions on CFPB's website.
The prototype follows directions in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and outlines prices, terms and bewares, while linking the information to an online consumer aid that further explains credit card users' rights, privacy issues, billing disputes, interest-rate calculations and late payment consequences, among additional information.
Never mind Senate Republicans want to defang the consumer watchdog agency and recently blocked confirmation of the agency's first director, the CFPB has been busy protecting consumers in the areas of mortgage fraud, reverse mortgages, student loans and credit scores, as well as credit cards.
Consumer Reports recently reported the CARD Act has helped reduce consumer complaints but credit cards remain one of the lowest-rated services Consumer Reports has ever analyzed; only 51 percent of respondents indicated they were highly satisfied with their cards.
CFPB says credit cards are simple to use, but can come with complicated use agreements that are tough to understand.
The simplified credit card agreement is part of CFPB's "Know Before You Owe" program of educating consumers because educated consumers make smarter decisions about financial matters.
The agency is seeking public comment on the prototype at its website and is testing it with the 1 million-member Pentagon Federal Credit Union, where about a third are credit card holders
The credit card disclosure prototype is part of the CFPB's larger credit card information efforts, including the recent "Consumer Response: Interim Report on CFPB's Credit Card Complaint Data" report of 5,000 credit card complaints and preparation for a credit card industry report to Congress.
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