Payment Law Advisor Legal Commentary and Resources for the Payment Industry

Assessing the Utility of CARD Act Disclosures

Posted in Regulatory and Compliance

PLA has for many years posted elite academic research questioning the utility of CARD Act disclosures.  For example, in 2013 we posted Regulating Consumer Financial Products: Evidence from Credit Cards by Sumit Agarwal from Georgetown University, Souphala Chomsisengphet from the Office of the Comptroller of the Currency, Neale Mahoney from the University of Chicago Booth School of Business and National Bureau of Economic Research, and Johannes Stroebel from New York University, the National Bureau of Economic Research, and the Centre for Economic Policy Research (CEPR). (See the 2014 update here).  Similarly, PLA today posts Minimum Payments and Debt Paydown in Consumer Credit Cards, by Benjamin Keys from the Wharton School and Jialan Wang from the Consumer Financial Protection Bureau (now at the University of Illinois).  This study concludes that fewer than 1% of consumers viewing the CARD Act-mandated 36-month repayment amount disclosure adopted an alternative monthly payment.  We will continue to monitor research in this area and will keep PLA readers apprised of pertinent developments.