The impact of local predatory lending laws

Giang Ho and Anthony Pennington-Cross

No 2005-049, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Local authorities in North Carolina, and subsequently in at least 23 other states, have enacted laws intending to reduce predatory and abusive lending. While there is substantial variation in the laws, they typically extend the coverage of the Federal Home Ownership and Equity Protection Act (HOEPA) by including home purchase and open-end mortgage credit, by lowering annual percentage rate (APR) and fees and points triggers, and by prohibiting or restricting the use of balloon payments and prepayment penalties. This paper provides a detailed summary of various local predatory lending laws that are effective as of the end of 2004. We also create an index that captures differences in the strength of the local laws along the two important dimensions of coverage and restrictions. In addition, our univariate results show that there is substantial heterogeneity in the observed market responses to the local laws.

Keywords: Predatory lending; Mortgages; Banking law; Home equity loans (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://s3.amazonaws.com/real.stlouisfed.org/wp/2005/2005-049.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:2005-049

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2005.049

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().