CUs Score High And Low on the Gobbledygook Index
Credit union members across the country face both the best and the worst in disclosure statements on their CU credit cards, according to survey of credit card disclosures conducted by a consumer and card media site.
CreditCards.com, a website that specializes in card news and card advertising, analyzed credit card disclosures from 1200 credit card issuers for both readability and understandability. According to its analysis, eight of the 10 least readable credit card disclosures in the country were published by CU card programs. But the analysis also found that all 10 of the most readable credit card disclosures in the country were published by CU card programs.
The CreditCards.com researchers put the disclosures through a pair of software programs that have long been used in the textbook and educational industries to measure the readability of texts. The researchers and the programs scored the disclosures using something called the "frequency of gobbledygook index." The higher a disclosure document's score, the more years of education an average reader would need to be able to read and understand it, the organization said.
The project judged the credit card disclosure published by the $240 million University of Illinois Employees Federal Credit Union, headquartered in Champaign, Ill., with being the most readable in the country with a score of 6. That means someone with a sixth grade education should be able to read and understand the disclosure.
But while many people recognize the scope of the problem, there is no real consensus on what to do about it. Neither CUNA nor NAFCU would comment for the record about the issue, with CUNA indicating that while certain things have to be disclosed about credit card programs as a matter of law or regulations, the exact way a credit union does that is up to the credit union.
Bill Lehman, vice president of card consulting for Card Services for Credit Unions, said he doesn't consult on the issue because it is not a compliance matter, but he surmised that the more risk-averse a credit union might be, the more likely its card disclosure might be longer and more difficult to read.