An update on trial disclosures

Yesterday, we made a significant update to our proposed policy to encourage trial disclosure programs. That policy is a core part of Project Catalyst, our initiative to support innovators in creating consumer-friendly financial products and services.

Our proposed policy aims to allow companies, on a trial basis, to test disclosures that may work better for consumers and companies. Under the proposal, we may permit a company to use a new disclosure or delivery method that, on a time-limited trial basis, is exempt from certain existing Bureau rules. Data from the trial program would then help us determine if the proposed innovation works better than the status quo.

Thanks to your feedback and discussions with stakeholders, we’ve made some important revisions and clarifications to the proposed policy , including the following:

• Iterative testing. Companies can conduct iterative testing during disclosure trials, making small adjustments throughout the trial rather than testing one static disclosure.
• Additional consumer safeguards. Trial proposals must identify any risks to consumers and include plans to mitigate those risks.
• Collaboration. To defray the costs of developing and testing trial disclosure, companies can submit collaborative proposals.
• Pre-submission consultation. Potential applicants can consult with the Bureau prior to formal submission, saving time and expense. Interested parties should email ProjectCatalyst@cfpb.gov.
• Delivery methods. Trial proposals can cover innovative delivery methods and platforms.
• Privacy. We will not ask for or accept any test data that includes consumers’ personally identifiable financial information.

Since our Know Before You Owe initiative—which launched before we officially opened for business—we’ve been working to create clear, plain language disclosures so that people better understand consumer financial products. We want the trial disclosure policy to help drive that initiative by enabling people to evaluate new approaches to disclosure—so long as certain key conditions, which are laid out in full in the proposed policy, are met.

Finally, next steps. We are inviting comments on Section A of the revised proposed policy, which describes the information companies should submit to us for their proposals. This comment process lasts 30 days, until July 18. The Office of Management and Budget (OMB) will then decide whether to approve the proposed policy. Once OMB’s assessment is complete, we will finalize the trial disclosure policy, consistent with OMB’s decision.

We look forward to continuing the conversation and learning more about potential ways to improve disclosures.