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.
Authors
- Sheisha Kulkarni
- Gonzalo Iberti
- Santiago Truffa
Institutions
- Adolfo Ibáñez University (CL)
- University of Virginia (US)
- Universidad Diego Portales (CL)
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
Funders
- Alfred P. Sloan Foundation
- Fondo Nacional de Desarrollo Científico y Tecnológico