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Know Before You Owe: Just one example of our approach to policy-making

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As the mortgage disclosure team said last week, we based Know Before You Owe on the idea that disclosure information is clearer when the people who will have to use those disclosures participate in designing them. We got feedback from many sources in many ways:

  • In-person testing of the forms in cities across the country from consumers and from people in the mortgage industry, both before proposing the new disclosures and after;
  • Online publication of various iterations of prototypes of the forms as we tested them and getting more than 27,000 clicks and comments to tell us what worked (and what didn’t);
  • Quantitative validation study with about 850 consumers of how well consumers understand the new disclosures compared to the ones currently in use (we’ll talk more about the results of that study in the days to come); and
  • Ongoing dialogue with industry groups, financial institutions, consumer advocates, policymakers from across government, and designers throughout the design process.

This testing and iteration process occurred alongside legally required feedback such as a Small Business Review Panel before we issued the proposed rule, and the public comment period for the proposed rule.

We started this prototyping and research even before the Bureau began regulating consumer financial products and services. In the process, we established a pattern of public inclusion in what we create. We have since taken on additional projects that rely on this pattern to succeed. In each case, we believe it has made us better at our work and will continue to do so.

Consumer tools

In April 2012, we introduced a beta version of a tool to help students compare the costs of college. Based on the feedback we got, we made improvements and re-released it along with a number of other tools to help students understand paying for college.

Now we’re working on similar tools to help people interested in owning a home. In each case, we continue to take feedback. We don’t believe that products to help consumers understand their options are ever complete. When we make new consumer tools, we commit to analyzing how people use them. The tools should change as we understand more about what’s useful or necessary, and what’s not.

Making information more accessible

We maintain a regularly updated public database of consumer complaints we receive. We also maintain an API that lets people build on top of that data.

A few months ago, we created a new platform to publish home mortgage data. Not every good idea for using consumer financial market data is ours; these platforms give the public access to data about their own experiences.

Last month, we launched a prototype tool to make regulations easier to read, understand, and use. After a series of user interviews and a number of prototype usability tests, we’ve piloted eRegulations with one regulation. Before making any decisions on what to do with it next, we’re asking people who need to understand changes to Regulation E to use it and let us know how it works for them.

Prototyping better disclosures

The prototyping efforts of Know Before You Owe laid the groundwork for another initiative. Federal consumer finance regulations should protect consumers, not hinder innovations that help them. Through Project Catalyst, we work with innovators to do just that. Someone who spots a way to make regulations more innovation-friendly can work with us to design experiments. Someone who thinks there’s a way to make disclosures clearer can work with us to start a trial that tests how well their idea works.

Open source software

Source code written by our staff is public domain by default. Anyone can use and build on it as long as it meets a few standards. And we are committed to publishing it in an online source code community. CFPB Open Tech gives the public easy access to free, open source software they can use as the basis for their own new tools and approaches. In turn, we get to review ideas from other developers and decide whether to use them to make our software better.

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In short, we value building things with public participation. It comes back to the same basic point: if you know people are going to have to use something, you should work with them to figure out what makes it useful. It’s an idea we have espoused since the start of Know Before You Owe, one we’re going to continue to build on.

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