Politicizing consumer credit

• 成果类型: Article
• 署名作者: Akey, Pat; Heimer, Rawley Z.; Lewellen, Stefan
• 署名单位: University of Toronto; Boston College; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2020.07.017
• 发表日期: 2021
• 页码: 627-655
• 关键词: political connections; Consumer credit; political economy; household finance; Regulatory enforcement

摘要

Powerful politicians can interfere with the enforcement of regulations. As such, expected political interference can affect constituents' behavior. Using rotations of Senate committee chairs to identify variation in political power and expected regulatory relief, we study powerful politicians' effect on consumer lending to communities protected by fair-lending regulations. We find a 7.5% reduction in credit access to minority neighborhoods in states with new committee chairs. Larger reductions occur in Community Reinvestment Act-eligible neighborhoods and when Senators serve on committees that oversee the enforcement of fair-lending laws. Banks headquartered in powerful Senators' states are responsible for the reduction in credit access. (C) 2020 Elsevier B.V. All rights reserved.