The Consumer Financial Protection Bureau plans to test a shorter, more concise, credit card agreement with members of Pentagon FCU.
The bureau’s acting director, Raj Date, announced last Wednesday that the form is approximately 1,100 words, compared with the average form which is 5,000 words.
It plans to initially use the form with Pentagon FCU and post it on it on the agency’s website so the public can comment. At $15.8 billion, PenFed is one of the three credit unions over $10 billion in assets that fall under the CFPB’s direct supervision authority.
“We think banks, credit unions and other credit card issuers are going to like our prototype. Pentagon Federal Credit Union, one of the largest credit unions in the country, with 1 million members and more than 350,000 cardholders, has already signed up to test the idea. We plan to continue to work with PenFed and whoever else wants to join us to make a simplified, shortened agreement an industry reality,” Date said at a news conference in Cleveland.
A Pentagon spokeswoman didn’t immediately return a phone call seeking comment.
The form contains information such as interest rates, the costs of balance transfers and cash advances and explains how interest rates are calculated.
The form is part of the bureau’s “Know before You Owe,” program, designed to give consumers extensive information about the cost of obtaining credit.
The CFPB is in the process of combining the mortgage disclosure forms required under the Truth in Lending Act and the Real Estate Settlement Procedures Act.
The CFPB unveiled the form one day before the Senate was scheduled to vote on the confirmation of Richard Cordray to be the agency’s first permanent director.