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Effects of Consumer Financial Protection Introduced after the Financial Crisis of 2007-2008

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  • Garcia Gonzalez, Javier

Abstract

This paper studies the effects of consumer financial protection regulation introduced in the US after the financial crisis of 2007-2008. It starts with a review of bounded rationality in the context of retail financial markets. I analyze the survey of consumer finances using diffs-in-diffs, paying special attention to the singularities of this dataset. The main goal is to assess the effectiveness of regulatory changes. Secondarily, the paper tries to find out if deception was occurring in the marketplace. There is support for the effectiveness of the 2011 FTC advertising rule. Results reject effectiveness of HOEPA rule of 2008 and HEOA provisions about private education loans.

Suggested Citation

  • Garcia Gonzalez, Javier, 2018. "Effects of Consumer Financial Protection Introduced after the Financial Crisis of 2007-2008," MPRA Paper 89226, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89226
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    File URL: https://mpra.ub.uni-muenchen.de/89226/1/MPRA_paper_89226.pdf
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    References listed on IDEAS

    as
    1. Thomas Philippon, 2015. "Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation," American Economic Review, American Economic Association, vol. 105(4), pages 1408-1438, April.
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    5. Inderst, Roman & Ottaviani, Marco, 2012. "How (not) to pay for advice: A framework for consumer financial protection," Journal of Financial Economics, Elsevier, vol. 105(2), pages 393-411.
    6. Paul Heidhues & Botond Kőszegi & Takeshi Murooka, 2017. "Inferior Products and Profitable Deception," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 323-356.
    7. Susan E. Woodward & Robert E. Hall, 2012. "Diagnosing Consumer Confusion and Sub-optimal Shopping Effort: Theory and Mortgage-Market Evidence," American Economic Review, American Economic Association, vol. 102(7), pages 3249-3276, December.
    8. Stefano DellaVigna & Ulrike Malmendier, 2004. "Contract Design and Self-Control: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 353-402.
    9. Michael D. Grubb, 2015. "Consumer Inattention and Bill-Shock Regulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 219-257.
    10. Roman Inderst & Marco Ottaviani, 2012. "Financial Advice," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 494-512, June.
    11. Carlin, Bruce I., 2009. "Strategic price complexity in retail financial markets," Journal of Financial Economics, Elsevier, vol. 91(3), pages 278-287, March.
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    More about this item

    Keywords

    consumer financial protection; regulation; mortgages; deception; exploitation; credit costs; credit access;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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