Public Disclosure and Consumer Financial Protection

64 Pages Posted: 6 Aug 2020

See all articles by Yiwei Dou

Yiwei Dou

New York University (NYU) - Department of Accounting

Yongoh Roh

New York University (NYU), Leonard N. Stern School of Business

Date Written: July 9, 2020

Abstract

The U.S. Consumer Financial Protection Bureau has accepted complaints about banks’ financial products and services since 2011 and has released the complaint database to the public since 2013. We analyze the effectiveness of this public disclosure in protecting mortgage borrowers. We find a greater reduction in mortgage applications to banks that receive more mortgage complaints in local markets after the disclosure. The effect is stronger in areas with more sophisticated consumers and higher credit competition, and for banks receiving more severe complaints. The number of monthly mortgage complaints per bank exhibits faster mean reversion after the publication of the database. Our findings suggest that the public disclosure of banks’ provision of inferior products and services enhances product market discipline and consumer financial protection.

Keywords: Public Disclosure, Mortgages, Complaints, Applications

JEL Classification: D18, G20, G51, O30

Suggested Citation

Dou, Yiwei and Roh, Yongoh, Public Disclosure and Consumer Financial Protection (July 9, 2020). NYU Stern School of Business, Available at SSRN: https://ssrn.com/abstract=3647491 or http://dx.doi.org/10.2139/ssrn.3647491

Yiwei Dou (Contact Author)

New York University (NYU) - Department of Accounting ( email )

40 West 4th Street
Suite 10-180
New York, NY 10012
United States

Yongoh Roh

New York University (NYU), Leonard N. Stern School of Business ( email )

40 West 4th Street
Suite 10-180
New York, NY 10012
United States

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