Debt Collection Agencies and the Supply of Consumer Credit

Viktar Fedaseyeu

No 20-06, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: This paper finds that stricter laws regulating third-party debt collection reduce the number of third-party debt collectors, lower the recovery rates on delinquent credit card loans, and lead to a modest decrease in the openings of new revolving lines of credit. Further, stricter third-party debt collection laws are associated with fewer consumer lawsuits against third-party debt collectors but not with a reduction in the overall number of consumer complaints. Overall, stricter third-party debt collection laws appear to restrict access to new revolving credit but have an ambiguous effect on the nonpecuniary costs that the debt collection process imposes on borrowers.

Keywords: household finance; consumer credit; creditor rights; contract enforcement; debt collection; law and finance (search for similar items in EconPapers)
JEL-codes: D12 D18 G18 G20 K35 (search for similar items in EconPapers)
Pages: 88
Date: 2020-02-12
New Economics Papers: this item is included in nep-ban and nep-law
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Debt collection agencies and the supply of consumer credit (2015)
Working Paper: Debt collection agencies and the supply of consumer credit (2013)
Working Paper: Debt Collection Agencies and the Supply of Consumer Credit (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:87462

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DOI: 10.21799/frbp.wp.2020.06

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