Electronic disclosures on mobile devices: CFPB to study

On August 11, 2021, the Consumer Financial Protection Bureau (CFPB) published a notice and request for comment in connection with its plans to conduct studies to understand the use of electronic disclosures on mobile devices. The CFPB intends to use methodologies rooted in psychology and behavioral economics to understand such use.  The studies will involve showing information to participants similar to financial disclosures and collecting information including demographics, psychological measures around reading electronic disclosures, and information on how consumers currently engage with their finances on different devices (eg, phone, computer).

The CFPB is seeking comments on its approach to conducting these studies. Comments are due by September 10, 2021.

As mobile devices have become the platform of choice for many consumers, the effective delivery of disclosures on those devices has become a key consideration for financial service providers, as well as for other providers of good and services. 

Electronic records should be presented so that they are easy to identify, navigate and read. They should be presented at the appropriate time and sequence in the context of the transaction.

Below are some current best practices that the authors recommend for electronic disclosure presentation.  Please note this is not a substitute for legal advice.  Mobile devices may have particular applications that need additional consideration.    

Best practices

• Disclosures, notices and agreement terms should generally be placed above, or to the left, of any decision the transaction participant is asked to make by checking a box, clicking a button or creating an electronic signature (ie, a “call to action”).  In particular, disclosures should generally not appear below or to the right of a call to action.
• Electronic records may generally be displayed behind properly labeled hyperlinks. When using hyperlinks, it is encouraged to always take into account general principles of fairness and state and federal prohibitions against unfair and deceptive practices.
  • Hyperlinks should go directly to disclosures –  “nesting” hyperlinks (ie, a hyperlink that leads to a second hyperlink, that leads to a third hyperlink, and so on) should be avoided except in very limited circumstances.
  •  Appropriate methods used for identifying the information associated with a hyperlink include:
    • Labeling the hyperlink itself with a description of the information associated with it
    • Providing a description of the associated information in immediate proximity to the hyperlink, together with an instruction to use the hyperlink to access the associated information
    • Embedding the hyperlink in an email or other electronic message together with a description of the information associated with the hyperlink
  • Electronic records should be presented in a clear and easily readable format, which includes using:
    • A clear, visible heading to describe the information
    • An easy-to-read typeface along with wide margins, ample line spacing and boldface or italics for key words
    • Various graphic devices to draw the transaction participant’s attention to the relevant information
  • The transaction participant should be provided a method for accessing and retaining electronic records during the transaction.  This includes:
    • Not inhibiting the transaction participant’s ability to print or store the electronic record
    • Providing the electronic record in a form that can be stored and accurately reproduced for later reference which could an option to provide copies of the documents via email.

For more information on the study or providing comments, please contact any of the authors.