The Double Helix of Policy Development and Consumer Testing of Mortgage Disclosures

Speakers:

Susan Kleimann, Center for Plain Language

Richard Horn, Consumer Financial Protection Bureau

Presentation Slides:

Session Description:

Conventional logic would dictate making policy decisions and then figuring out how to get the disclosure to “share” this information. In this presentation, we will discuss the reverse: how consumer-testing of a developing disclosure helped to inform policy and regulation decisions. As part of the Dodd-Frank Act, the Consumer Financial Protection Bureau must integrate the mortgage disclosures required by the Truth-in-Lending Act and the Real Estate Settlement Procedures Act. Combining two long-established disclosures allows the Bureau to make a set of complex legal disclosure requirements understandable to everyday consumers.

This 18-month user-centered design process included consumer testing at 10 sites of 92 consumers and 22 industry representatives in addition to supplemental information collected on the CFPB website where each round’s prototypes were publicly posted for comments. More than 25,000 industry and consumer comments were made. The combining of the long standing disclosures required many design choices about how to present the required information, such as: what information to emphasize; what order to put the information in; the most understandable way to describe complex legal concepts; and the level of detail to require. All design decisions have an impact on the regulations that tell industry how to comply. This discussion will illustrate how the intertwining of policy-making and consumer-testing worked together to design a disclosure focused on consumer understanding.

We will show the proposed Disclosures.

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