The Effect of Debt Collection Laws on Access to Credit

42 Pages Posted: 19 Feb 2018  

Ryan Sandler

Consumer Financial Protection Bureau

Charles J. Romeo

Consumer Financial Protection Bureau

Date Written: February 12, 2018


Debt collection by third party collection agencies is an important part of the market for consumer credit, but has been little studied in the economics literature. Regulations on debt collection practices can protect consumers, but may also lead to unintended consequences as the costs of better practices are passed on to creditors, who in turn restrict consumers' access to credit or raise prices. Using detailed administrative data on new credit card accounts, this paper studies the effects of four recent state laws and regulations that placed restrictions on the conduct of debt collectors. We find that such restrictions reduce access to credit card accounts and raise prices for credit cards, but that this effect is very small of a similar magnitude to a minor change in the average consumers' credit score.

Suggested Citation

Sandler, Ryan and Romeo, Charles J., The Effect of Debt Collection Laws on Access to Credit (February 12, 2018). Consumer Financial Protection Bureau Office of Research Working Paper No. 2018-01. Available at SSRN: or

Ryan Sandler

Consumer Financial Protection Bureau ( email )

1275 First Street NE
Washington, DC 20580
United States

Charles J. Romeo (Contact Author)

Consumer Financial Protection Bureau

United States

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