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Elizabeth Warren complains about overdisclosure

I saw her quoted on television complaining about the length of credit card contracts being "tricks and traps," and it's apparently a regular talking point:

In 1980, according to the Wall Street Journal, the typical credit card contract was about a page and a half long. It told you about the interest rate, about being late and that was pretty much it. Today, the typical credit card contract according to the Wall Street Journal is about 31 pages long. So, tricks and traps? It's that other 29 and a half pages.

To which I respond, "No, Professor Warren. The reason that credit-card contracts are 31 pages long is because your trial-lawyer buddies persistently sued credit-card companies for failure to disclose, and the lawyers kept making them add more and more to credit-card contracts to settle past or avoid future lawsuits. And all of this could have been avoided if you permit credit-card customers to opt out of the expensive and inefficient legal system that requires such overdisclosure, except your future Consumer Financial Protection Bureau is almost certain to bar consumer choice to agree to arbitrate these disputes."

Perhaps if Warren is appointed CFPB head, she'll require credit-card contracts to be a page and a half long again—and then start a new cycle of state-law class actions complaining about failure to disclose and arguing that CFPB regulations don't preempt those lawsuits. That'll surely make lawyers better off; consumers, not so much.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.