Bank Supervision and Organizational Capital: The Case of Minority Lending

• 成果类型: Article
• 署名作者: An, Byeongchan; Bushman, Robert; Kleymenova, Anya; Tomy, Rimmy E.
• 署名单位: Utah System of Higher Education; University of Utah; University of North Carolina; University of North Carolina Chapel Hill; University of North Carolina School of Medicine; Federal Reserve System - USA; Federal Reserve System Board of Governors; University of Chicago
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12529
• 发表日期: 2024
• 页码: 505-549
• 关键词: management control-systems; home ownership; RACE; DISCRIMINATION; credit; RISK; WEALTH; INFORMATION; incentives; strategy

摘要

We investigate whether improvements in banks' organizational capital and control systems facilitate increased loan origination to minority borrowers. We focus on bank supervisors' enforcement decisions and orders (EDOs) against banks and hypothesize that EDO-imposed improvements in loan policies, internal governance, and employee training mitigate deficiencies in credit assessments and lending decisions that previously disadvantaged minority borrowers. We find that mortgage origination to minority borrowers increases following the resolution of EDOs, and more so for banks with stricter supervisors or more severe EDOs. Using a semisupervised machine learning method to analyze the text of EDOs, we find that such increases are higher for EDOs specifying revisions of loan policies, implementation of formal internal governance procedures, or more employee training. Overall, we find that EDO-driven improvements in organizational capital generate unintended, positive social externalities that enhance access to credit for minority borrowers.