This afternoon, Professor Warren spoke at an event celebrating the 75th anniversary of Consumers Union. During her speech, she spoke about the Miss April’s emphasis on clear prices and risks, which will help consumers make the choices that are best for themselves and their families. She also announced a conference one week from today on the first anniversary of the date that most provisions of the Credit CARD Act took effect.
Below is an excerpt from her remarks:
The fine print and the ability to change products and prices in subtle and not-so-subtle ways creates layers of complexity that stand in the way of direct, apples-to-apples comparisons among credit products. The kind of comparisons that drive competition around lower prices and better features for cameras and toasters is too often missing for credit cards and checking accounts. How does a consumer compare two credit products based on an advertisement when the true cost won’t be clear until months later? And how does a consumer draw comparisons when there are so many different components of cost in each product? How does a consumer keep track of the continual evolution of the products being offered across the entire market by different providers? And, finally, how does a consumer draw comparisons among products without knowing the nature or likelihood of changes that are likely to occur after the deal is struck?
That’s where the new consumer bureau comes in.
We believe in comparison shopping. We want the price and the risks to be clearer, so that consumers can see what is being offered and decide the products that are best for them. We want to see innovations, lots of innovations. But innovations need to be around real product differences that consumers can see and understand – not around misleading advertising and new tricks buried in the fine print. Our goal is simple: We want the credit market to work better for consumers, for responsible providers, and for the whole economy.
Congress has already begun to change credit markets. The new CARD Act changed certain elements of credit card pricing, and the mortgage reform provisions of Dodd-Frank will alter some of the ways mortgages are sold. It is too soon to tell how much these new rules will push the markets in the right direction, but the consumer bureau is already beginning the work of trying to assess how the market has reacted to changes in the credit card landscape and to watch out for consumers.
One week from today, the consumer bureau will host a conference on the Credit CARD Act at the Treasury building in Washington. Congress indentified a number of unfair practices in the credit card industry and outlawed them in the CARD Act, and it will be the one-year anniversary of the implementation of most of the provisions that law. Our plan is to find out how much has changed in that year. To do that, we are going to take a hard look at the data – interest rates, re-pricing and the like. We will bring together academics, industry leaders, consumer advocates, and voices from within government to look at the data from multiple directions, and to analyze how the industry has reacted and how consumers are responding. The idea is to establish a fact base upon which the Miss April can improve our understanding of the impact of the CARD Act and to help us understand how we can make credit markets work better.