• 12.08.11

Could Better Design Reform The Banking Industry?

The government just unveiled a prototype of a new clear and readable credit card agreement, with the goal of making sure people understand what they’re getting into when they get a new card.

While Occupy protesters are holding sit-ins in foreclosed homes and pledging to default on their student loans, Madison Avenue, too, is targeting Wall Street’s abusive practices. The Consumer Finance Protection Bureau, the new government agency formerly led by high-profile Senate candidate Elizabeth Warren, has just unveiled a prototype of a new, radically simplified credit card agreement, with the aim of letting Americans take control of their credit by making the information in their contracts much more clear


The designer is Peter Sunna, who’s worked for brands like Burton and Microsoft, and who was recruited by none other than the cutting-edge marketing group Co: Collective, an outfit highlighted for its innovative business structure in Fast Company‘s Future of Advertising piece. (Sunna also did the identity design for Co:Collective’s new coworking space Grind.

Two-thirds of consumers say they don’t understand how their credit cards work, and no wonder. The typical agreement is eight or nine pages crammed with impenetrable legalese in tiny print (find your credit card agreement in this database). Neil Parker, Chief Strategy Officer for Co, says “We applied product design principles. We thought of this as an interface: You strip it to its essentials and add things in the order you’ll be using them.”

The new prototype agreement is a much cleaner two pages of normal size type, written in plain English, with all the relevant numbers like interest rates and fees made large and easily visible. Underlining marks terms like “balance transfer” that have standardized legal definitions, which can be accessed online or on paper for further clarity, saving precious space while creating a hyperlinked document.

The form will be piloted by the Pentagon Federal Credit Union and CFPB is also taking public comments.

The CFPB is betting that knowledge is power; that clear type and an eye-catching layout will expose the worst “tricks and traps” of a despised industry and ultimately protect you, the consumer, from racking up those 31% penalty interest rates and $35 late fees or maybe even discourage their use in the first place. But they’re not mandating the use of this form; rather, they’re hoping that improved design will lead to consumer demand and ultimately a new industry standard.

About the author

She’s the author of Generation Debt (Riverhead, 2006) and DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education, (Chelsea Green, 2010). Her next book, The Test, about standardized testing, will be published by Public Affairs in 2015.