Professor Jeff Sovern co-authored an op-ed with Nahal Heydari for American Banker, titled For many borrowers, Truth in Lending Act disclosures aren’t enough. The essay, available on Lexis, is based on their longer article, Not-So-Smartphone Disclosures, and reports on the results of a survey of consumer understanding of credit card disclosures on smartphones and other computers. Here is an excerpt:

If we had graded the consumers by the same metric used in many schools, where passing requires getting 65% right, more than half would have failed. Only seven respondents scored 100%, while less than four percent got 90% or more correct. The disclosures may tell the truth, but for many consumers, it is a truth that might as well be in gibberish. And that means that for many consumers, the only consumer protection they receive against lenders who charge excessive prices is one they cannot use.

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The Truth in Lending Act was enacted to provide consumers “a meaningful disclosure of credit terms so that consumers will be able to . . . avoid the uninformed use of credit.” But it is failing many consumers. If we truly want to prevent consumers from being taken advantage of by predatory lenders, we have to find other ways.