At the National Bank of Washington, score one for the English language.
In an effort to blot out bureaucratese and make banking more understandable, the bank this week introduced a revised installment loan form phased as plain as a child's fairy tale and without a line of fine print on the whole page.
Describing it as "the first common language note" among Washington's banks, a spokesman said the new form is the result of a survey of 750 customers about what they could and could not understand when they signed for a loan from the bank.
The introduction of the new note coincides with President Carter's call for all government regulations and contracts to be written in plain English," said Michael F. Melville, a bank vice president. "It also follows recent U.S. Senate hearings on simplification of truth in-lending laws."
Those Senate hearings riveted attention on the inconveniences and misunderstandings buyers and sellers alike have suffered as a result of which were supposed to make financial forms easier to understand. Among the problems have been an increase in paperwork and poor itemization.
The National Bank of Washington form improves on some of these. For instance, although credit life insurance is not required to get a loan from a bank, this has not generally been made clear in loan forms. As a result, 95 per cent of those who take out bank loans purchase the insurance to protect the bank in the event they die before the loan is paid in full.
The new form states clearly, "Credit life insurance is not required to obtain this loan."
Other examples of how the revised version improves on the old include:
The old: "Maker(s) acknowledge receipt of an completely filled in copy of this note, and disclosure loans statement prior to the execution hereof this day of , 19 "
The new: "I received a completely filled in copy of this note."
The old: "This loan is secured by a security interest under a Security Agreement in . . ."
The new: To protect the National Bank of Washington. I give what is known as a security interest in my auto and or other . . ."
The old: "If this loan is prepaid either by cash, new loan, refinancing or otherwise before the final installment due date, the maker shall receive a rebate of precomputed interest, calculated under the Rule of 78's."
The new: "If I pay this loan off in full, ahead of schedule. I will not have to pay the full finance charge. I will pay a finance charge on the amount I have borrowed only for the number of days I have had the loan - from the day I received the loan until the day I pay off the loan."