Piercing through Opacity: Relationships and Credit Card Lending to Consumers and Small Businesses during Normal Times and the COVID-19 Crisis

• 成果类型: Article
• 署名作者: Berger, Allen N.; Bouwman, Christa H. S.; Norden, Lars; Roman, Raluca A.; Udell, Gregory F.; Wang, Teng
• 署名单位: University of South Carolina System; University of South Carolina Columbia; Texas A&M University System; Texas A&M University College Station; University of Pennsylvania; Getulio Vargas Foundation; Federal Reserve System - USA; Federal Reserve Bank - Philadelphia; Indiana University System; Indiana University Bloomington; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/726236
• 发表日期: 2024
• 页码: 484-551
• 关键词: Relationship banking; adverse selection; switching costs; ARMS-LENGTH; BEHAVIOR; INFORMATION; CUSTOMER; MARKET; PRODUCTS; benefits

摘要

We build a bridge between relationship lending and transactions lending-investigating relationship effects on contract terms for credit cards, a relatively pure transactions-lending technology. Using more than 1 million accounts, we find that during normal times, consumers with relationships obtain better terms but small businesses with relationships do not. Both groups obtain improved terms during COVID-19, consistent with intertemporal smoothing-relationship borrowers obtain more favorable terms during crises, paid for by worse terms in normal times. Among other findings, CARES Act impediments to reporting consumer delinquencies to credit bureaus, designed to protect customers, reduced informational value of credit scores, penalizing safer consumers.