Know Before You Owe is the name for a series of projects undertaken by the Bureau to simplify some of the documents consumers rely on to make financial choices for themselves and their families. All of these projects have been participatory; we collected feedback from the public both online and offline, and used that feedback to inform disclosures and documents that work for everyone.
Know Before You Owe: Mortgages
Launched in May 2011, the original Know Before You Owe project centered on combining the two key federal mortgage disclosures you get when you take out a loan to purchase a home or to refinance your mortgage – the Truth in Lending Disclosure and the HUD-1 Settlement Statement – into a single, easier-to-use form. We proposed a rule, including the new forms, on July 9th, 2012.
The online Know Before You Owe tool asked consumers and lenders to tell us what kinds of disclosures worked best, and why. By the end of the project, we received over 27,000 individual comments from online participants.
Know Before You Owe: Student loans
In October 2011, we launched a draft one-page “financial aid shopping sheet” – a model disclosure form that colleges and universities could use to make the costs and risks of student loans clear upfront, before students have enrolled. We received many online comments that we have shared with the Department of Education, which plans to publish a model format that schools can use to communicate financial aid offers.
We also developed an online cost comparison worksheet to help students and families make side-by-side school cost comparisons using their own unique financial circumstances. This beta project was live from April to May 2012, and yielded much useful information.
Know Before You Owe: Credit Cards
In December 2011, we developed a shorter, simpler credit card agreement that spells out the terms for the consumer. While it was not a mandated model form, we took this approach to help consumers better understand their credit card agreements.
We also launched a searchable database of credit card agreements so that consumers can easily find and understand what their current credit card agreements look like.