Do Consumers Need a Paper Trail?
I have a confession to make: the longer I do this job, the more frustrated I get by so-called consumer advocates. Taken to an extreme, consumer advocacy is based on the assumption that the vast majority of people can’t be trusted to make their own choices. Furthermore, anyone who holds them accountable for their choices is somehow anti-consumer as opposed to pro free choice.
The latest example of this condescending attitude, which unfortunately has a direct impact on financial innovation, is a recent report published by the National Consumer Law Center. According to this report, electronic statements provide inadequate protections for poor and elderly consumers. And, of course, “some financial institutions are aggressively pushing consumers into electronic statements, using tactics that are questionable and arguably illegal.” Their proposed solution? The CFPB needs to do more to protect consumers who want to keep paper statements.
First, the compliance part of this blog. New York Law already prohibits businesses from charging the consumer a higher rate or fee for requesting a paper billing statement. (See 399-zzz General Business Law). However, it also permits businesses to offer incentives to consumers that elect to use electronic statements. My personal interpretation is that you can’t charge someone more money for receiving a paper statement, but you can provide discounts to members who agree to receive statements electronically.
Are electronic statements the perfect solution for everyone? No, but if I had my way, I would still be using WordPerfect to write this blog. Times change and government shouldn’t stand in the way of technological innovations that make things more efficient, cheaper, and, by the way, better for the environment.
Furthermore, there have been several reports citing the use of cell phones to better integrate poor individuals into the financial market place. After all, more Americans have smartphones than bank accounts. But, according to the NCLC, “consumers will inevitably miss important information if they are limited to tiny text produced on a 3-5 inch screen.”