Debt Collection Agencies and the Supply of Consumer Credit
Abstract: This paper ﬁnds that stricter laws regulating third-party debt collection reduce the number of third-party debt collectors, lower the recovery rates on delinquent credit card loans, and lead to a modest decrease in the openings of new revolving lines of credit. Further, stricter third-party debt collection laws are associated with fewer consumer lawsuits against third-party debt collectors but not with a reduction in the overall number of consumer complaints. Overall, stricter third-party debt collection laws appear to restrict access to new revolving credit but have an ambiguous eﬀect on the nonpecuniary costs that the debt collection process imposes on borrowers.
File(s): File format is text/html https://philadelphiafed.org/-/media/research-and-data/publications/working-papers/2020/wp20-06.pdf
Provider: Federal Reserve Bank of Philadelphia
Part of Series: Working Papers
Publication Date: 2020-02-12