The Effect of Debt Collection Laws on Access to Credit

77 Pages Posted: 19 Feb 2018 Last revised: 16 Sep 2020

See all articles by Ryan Sandler

Ryan Sandler

Consumer Financial Protection Bureau

Charles J. Romeo

Consumer Financial Protection Bureau

Date Written: September 4, 2020

Abstract

Debt collection is an important part of the consumer credit ecosystem, but has received little attention in the economics literature. Regulations on collection practices can protect consumers, but may also lead to unintended consequences if the costs of better practices are passed on to creditors, who in turn restrict consumers' credit access or raise prices. Using detailed data on new credit card accounts, we study the effects of four recent state laws and regulations that instituted conduct restrictions. We find that such restrictions reduce access to credit card accounts and raise interest rates, but that this effect is very small.

Suggested Citation

Sandler, Ryan and Romeo, Charles J., The Effect of Debt Collection Laws on Access to Credit (September 4, 2020). Consumer Financial Protection Bureau Office of Research Working Paper No. 2018-01, Available at SSRN: https://ssrn.com/abstract=3124954 or http://dx.doi.org/10.2139/ssrn.3124954

Ryan Sandler

Consumer Financial Protection Bureau ( email )

1700 G Street NW
Washington, DC 20580
United States

Charles J. Romeo (Contact Author)

Consumer Financial Protection Bureau ( email )

United States

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