Work

Removing the fine print: Disclosure, standardized products, and consumer outcomes

Year: 2026

Type: article

Abstract: Hidden fees can distort consumer decision-making. In response, regulators historically have (a) improved disclosure to make fees more salient or (b) standardized products to restrict what fees can be charged. We use Chilean administrative data and a multi-stage natural experiment to separately identify the effects of disclosure and standardization on repayment. We find that disclosure reduces delinquencies by 13.7 percentage points (40%) and default by 1.68 percentage points (98%), whereas standardization has no effect. We find no effect on initial loan terms, suggesting that disclosure’s effects are specific to repayment behavior: specifically, disclosure improves borrowers’ understanding of their credit obligations.

Source: Journal of Financial Economics

DOI: 10.1016/j.jfineco.2026.104353

Authors: Sheisha Kulkarni, Santiago Truffa, Gonzalo Iberti

Institutions: University of Virginia, Adolfo Ibáñez University, Universidad Diego Portales

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,740

Funders: Alfred P. Sloan Foundation, Fondo Nacional de Desarrollo Científico y Tecnológico