March 31, 2006
Comptroller of the Currency Praises Effort to Improve Financial Disclosures
WASHINGTON, D.C. – Comptroller of the Currency John C. Dugan praised an interagency effort to improve financial disclosures to consumers following the release of a research report today. His statement follows:
I applaud the interagency effort to improve financial disclosures for consumers. The research released today highlights the importance of focusing on the consumer in developing financial notices and communications of any kind.
Effective consumer-oriented financial disclosures are one key to consumer protection. Disclosures that are too complicated and too long are often ignored by people who need to know the details and risks of the products they are considering. Effective disclosures give people the information they need to make well-informed decisions, and well-informed consumers are the heart of a vibrant free market system.
I look forward to the next phase of this effort that will seek even wider input from consumers throughout the country as regulators and the industry work toward improving disclosures. These efforts will result in better informed and better protected consumers, clearer accountability concerning consumer treatment and consumer behavior, reduced regulatory burden, and a stronger financial services marketplace.
Sponsored by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission; the report presents findings from more than a year of consumer-centered research involving focus groups and in-depth interviews throughout the United States to gauge consumer reactions to a variety of privacy notice formats and language. The report presents one model disclosure statement for further testing.
The report concludes that consumers need a context for understanding information in financial privacy notices. The research shows that while there is a general awareness of information sharing practices, most consumers do not understand them.
The second phase, which also includes the Office of Thrift Supervision, will expand that research to include a much wider group of consumers to measure the effectiveness of sample notices.