Regulations, Community Bank and Credit Union Exits, and Access to Mortgage Credit

51 Pages Posted: 4 Jul 2014 Last revised: 23 Oct 2018

See all articles by Alexei Alexandrov

Alexei Alexandrov


Xiaoling Ang

Independent; Marsh & McLennan Companies - New York Office

Date Written: October 14, 2018


We analyze the effect of a U.S. subprime mortgage regulation on the availability of mortgage credit. Due to all subprime mortgage originators being affected by the regulation studied, there is no natural control group. We use a pro t maximization assumption to construct a control group. We nd no statistically signi cant impact of the regulation, despite about 200 institutions exiting the subprime mortgage market in over 200 counties, although we cannot rule out economically signi cant impacts on some types of loans for certain types of borrowers. These results, along with other evidence presented in the article, suggest that consumers were able to switch to similar loans originated by the exiting creditors' competitors. We then perform several robustness checks, including comparing our approach with a more traditional method of using an unaffected but related market (subprime manufactured housing) as a control group and analyzing the effects of a later regulation exempting many creditors from the aforementioned regulation, with this later regulation presenting a natural threshold for a regression discontinuity approach.

Keywords: program evaluation, regulation, mortgage, access to credit, consumer protection

JEL Classification: L51, C21, G21

Suggested Citation

Alexandrov, Alexei and Ang, Xiaoling, Regulations, Community Bank and Credit Union Exits, and Access to Mortgage Credit (October 14, 2018). Available at SSRN: or

Alexei Alexandrov


No Address Available

Xiaoling Ang (Contact Author)


No Address Available

Marsh & McLennan Companies - New York Office ( email )

1166 Avenue of the Americas, 34th Floor
New York, NY 10036
United States

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