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

Sheisha Kulkarni, Santiago Truffa, Gonzalo Iberti

Journal of Financial Economics · 2026 · Volume 185

DOI: 10.1016/j.jfineco.2026.104353

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.

Keywords

Complexity, Consumer financial protection, Contract design, Disclosure, Standardization

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