Does CFPB Oversight Crimp Credit?

Andreas Fuster, Matthew Plosser and James Vickery ()

No 21-08, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We study how regulatory oversight by the Consumer Financial Protection Bureau (CFPB) affects mortgage credit supply and other aspects of bank behavior. We use a difference-in-differences approach exploiting changes in regulatory intensity and a size cutoff below which banks are exempt from CFPB scrutiny. CFPB oversight leads to a reduction in lending in the Federal Housing Administration (FHA) market, which primarily serves riskier borrowers. However, it is also associated with a lower transition probability from moderate to serious delinquency, suggesting that tighter regulatory oversight may reduce foreclosures. Our results underscore the trade-off between protecting borrowers and maintaining access to credit.

Keywords: consumer financial protection; regulation; mortgages; servicing; credit supply (search for similar items in EconPapers)
JEL-codes: D18 G21 G28 (search for similar items in EconPapers)
Pages: 72
Date: 2020-02-26
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Related works:
Working Paper: Does CFPB Oversight Crimp Credit? (2021)
Working Paper: Does CFPB Oversight Crimp Credit? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:90049

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DOI: 10.21799/frbp.wp.2021.08

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