FOR IMMEDIATE RELEASE
ICBA to Fed: Eliminate Information Overload
Washington, D.C. (March 28, 2005) - In a letter to the Federal Reserve Board today, the Independent Community Bankers of America, the nation's largest banking trade organization, urged the Federal Reserve to reduce unnecessary regulatory burden on small banks and eliminate consumer "information overload" on disclosures.
The ICBA filed its comments on the Federal Reserve's review of disclosures and consumer protections under the Truth-in-Lending Act and Regulation Z. The ICBA applauded the Federal Reserve for undertaking the first comprehensive review of consumer disclosures in over 20 years and urged the agency to work with focus groups of consumers and industry representatives to develop meaningful disclosures.
"While the ICBA agrees that it is useful for the Federal Reserve to provide guidance on the format for disclosures, we disagree that specific mandates should be required; instead, individual creditors should be permitted some flexibility to provide disclosures in the manner that best meets the needs of their own customers and their particular market," wrote the ICBA. "However, presenting disclosures in a simple format, such as the existing box or table format, makes it easy for consumers to understand the basic terms and fees associated with a credit card account."
The ICBA also urged further steps to reduce information overload:
- Limit finance charge definition to fees assessed by the creditor as a cost of borrowing funds and not include fees that are the result of some event, such as a late payment, that are fundamentally outside the creditor's control.
- Regularly update model disclosures to keep pace with market developments, but only after consultation with consumer focus groups.
- Limit the amount of information included on periodic statements to the information most important to consumers, such as transactions and fees.
For the complete text of the letter, visit ICBA online at www.icba.org.