The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy
We examine how financial technology affects household hardship in terms of personal bankruptcy. We exploit an exogenous source of variation in marketplace lending, a court verdict rendering above-usury loans issued by banks to Connecticut and New York residents null and void if the loans are sold...
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| Main Authors: | , |
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| Other Authors: | |
| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
H. : ĐHKT
2020
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| Subjects: | |
| Online Access: | http://repository.vnu.edu.vn/handle/VNU_123/70559 |
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| Institution: | Vietnam National University, Hanoi |
| Language: | English |
| Summary: | We examine how financial technology affects household hardship in terms of personal
bankruptcy. We exploit an exogenous source of variation in marketplace lending, a court verdict
rendering above-usury loans issued by banks to Connecticut and New York residents null and void if
the loans are sold outright to non-banks. We document a persistent rise in personal bankruptcies
following the verdict and a decline in marketplace lending, particularly among low-income
households. Marketplace loan defaults and other consumer credit by banks and finance companies
remain unaffected, suggesting that increases in personal bankruptcy arise principally from reversing
access to new lending technology. |
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