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Full-Text Articles in Law
Information Asymmetries In Consumer Credit Markets: Evidence From Payday Lending, Paige Marta Skiba, Will Dobbie
Information Asymmetries In Consumer Credit Markets: Evidence From Payday Lending, Paige Marta Skiba, Will Dobbie
Paige Marta Skiba
Information asymmetries are prominent in theory but difficult to estimate. This paper exploits discontinuities in loan eligibility to test for moral hazard and adverse selection in the payday loan market. Regression discontinuity and regression kink approaches suggest that payday borrowers are less likely to default on larger loans. A $50 larger payday loan leads to a 17 to 33 percent drop in the probability of default. Conversely, there is economically and statistically significant adverse selection into larger payday loans when loan eligibility is held constant. Payday borrowers who choose a $50 larger loan are 16 to 47 percent more likely …
Avoiding The Pitfalls: Advertising In A Competitive Market, Francina Cantatore
Avoiding The Pitfalls: Advertising In A Competitive Market, Francina Cantatore
Francina Cantatore
The consumer credit industry is a competitive market which is facing challenging times in view of more stringent regulation in recent times. Advertising is an essential ingredient in generating business in this environment, thus an awareness of acceptable advertising parameters is important for credit providers. Not only do organisations face civil and criminal sanctions for transgressions of the legislation, but directors and managers may be personally liable for misleading or deceptive advertising. This paper deals with a discussion of advertising legislation and current developments; advertising interest rates and requirements for comparison rates; false or misleading advertising and ASIC Guidelines; including …
From Status To Contract: Evolving Paradigms For Regulating Consumer Credit, Rashmi Dyal-Chand
From Status To Contract: Evolving Paradigms For Regulating Consumer Credit, Rashmi Dyal-Chand
Rashmi Dyal-Chand
In the last four decades something radical has happened in the United States consumer economy: the ordinary, middle class homeowner has gained a new means for borrowing thousands of dollars. While consumers have long had the option of using their homes as collateral for loans, they can now use credit cards to borrow large sums without any security for those loans. This article explains the legal shift that accompanied this new type of loan transaction and explores changes in the credit relationship. While careful and extensive legal scholarship draws attention to the dramatic changes the credit card has made to …
A Step Too Far In Consumer Credit Protection: Are External Dispute Resolution Schemes Wielding The Sword Of Damocles?, Francina Cantatore, Brenda Marshall
A Step Too Far In Consumer Credit Protection: Are External Dispute Resolution Schemes Wielding The Sword Of Damocles?, Francina Cantatore, Brenda Marshall
Francina Cantatore
Under existing consumer credit legislation, all credit providers are required to be licensed with the Australian Securities and Investments Commission. Membership of an external dispute resolution scheme – either the Credit Ombudsman Service Limited (COSL) or the Financial Ombudsman Service– is compulsory for license holders. As members, credit providers are subject to the Rules and Constitutions of the respective schemes, a requirement which has far-reaching effects on commercial dealings. This article explores the scope of COSL’s powers, finding these to be excessively wide, and inherently unfair towards credit providers. The principal contention of the article is that, instead of providing …
Managing Medical Bills On The Brink Of Bankruptcy, Melissa B. Jacoby, Mirya Holman
Managing Medical Bills On The Brink Of Bankruptcy, Melissa B. Jacoby, Mirya Holman
Melissa B. Jacoby
This paper presents original empirical evidence on financial interactions between medical providers and their patients who go bankrupt. We use a nationally representative sample of people who filed for bankruptcy in 2007 to compare two popular but hotly contested methods of measuring medical burden. By applying both methods to the same filers, we find that nearly four out of five respondents had some financial obligation for medical care not covered by insurance in the two years prior to filing as measured by the survey method. The court record method paints a different picture, with only half of the cases containing …
The Debt Financing Of Parenthood, Melissa B. Jacoby
The Debt Financing Of Parenthood, Melissa B. Jacoby
Melissa B. Jacoby
In this contribution to the symposium Show Me the Money: Making Markets in Forbidden Exchange, I explore an under-appreciated participant in the assisted reproduction and adoption industries: consumer lenders. Through fertility clinics and other service providers, financial institutions market and distribute loans specifically to finance acquisition of treatments, drugs, and human eggs. Adoption foundations and agencies advertise for-profit loans to intended parents, while small foundations offer adoption loans that appear to be low-cost financially but may condition loan approval on intended parent characteristics such as religious observance, marital status, sexual orientation, and adherence to traditional gender roles. After discussing how …