Are Information Disclosure Mandates Effective? Evidence from the Credit Card Market

Enrique Seira
Alan Elizondo
Publication Type: 
Working Papers
Publication Year: 
2014
Consumer protection in fi nancial markets in the form of information disclosure is high on government agendas, despite the fact that the empirical evidence on its eff ectiveness is limited. To measure the impact of Truth-in-Lending-Act-type disclosures on default and indebtedness, as well as of debiasing warning messages and social comparison information, we implement a randomized control trial in the credit card market for a large population of indebted cardholders. We find that providing salient interest rate disclosures has no eff ect, while social comparisons and debiasing messages have only a modest e ffect. We also discuss the policy implications of these findings.
Region: 
United States and Canada
Topic: 
Regulation
Topic: 
Financial Institutions
Topic: 
Credit