The Federal Trade Commission responded Tuesday to the federal banking agencies' request for comment on their proposed illustrations of consumer information disclosures for subprime loans. Specifically, the FTC recommended that the agencies test whether the proposed disclosures will achieve their purpose of helping subprime borrowers make better informed loan choices and then develop a single disclosure document that summarizes key loan information. Improvements provided by an FTC prototype disclosure included a 66 percentage point increase in the proportion of respondents correctly identifying the total amount of up-front charges in the loan.
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