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

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.

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Publication Details

Journal
Journal of Financial Economics
Published
2026-09-05
DOI
https://doi.org/10.1016/j.jfineco.2026.104353
Primary Topic
Auditing, Earnings Management, Governance
Type
article
Field-Weighted Citation Impact
0.00

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article

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

Sheisha Kulkarni, Gonzalo Iberti, Santiago Truffa
Journal of Financial Economics
Auditing, Earnings Management, Governance
article

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

Sheisha Kulkarni, Gonzalo Iberti, Santiago Truffa
article en

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.

Journal of Financial EconomicsVol. 185
Adolfo Ibáñez University (CL), University of Virginia (US), Universidad Diego Portales (CL)
Alfred P. Sloan Foundation, Fondo Nacional de Desarrollo Científico y Tecnológico
Peace, Justice and strong institutions
Openalex Percentile: Top 4%
Auditing, Earnings Management, Governance
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