Search Results
Journal Article
Consolidation, technology, and the changing structure of banks' small business lending
The U.S. banking industry continues to consolidate, with large, complex banking organizations becoming more important. Traditionally, these institutions have not emphasized small business lending. On the other hand, technological advances, particularly credit scoring models, make it easier for banks to extend small business credit. To see what effects these influences might have generated on small business lending, David Ely and Kenneth Robinson explore the small business lending patterns at U.S. banks from 1994 through 1999. They find that larger banks are increasing their market share, ...
Journal Article
Did credit scores predict the subprime crisis?
One would think that credit scores would be a predictor of who would default on a subprime mortgage. But that doesn't seem to be the case.
Journal Article
Perspectives on credit scoring and fair lending: a five-part article series
Credit scoring has brought increased efficiency in the mortgage lending industry. It has also raised concerns about fair mortgage lending practices given the increasing use of credit scores in the underwriting process. In order to better understand the potential impact of credit scoring on mortgage applicants, The Federal Reserve System's Mortgage Credit Partnership Credit Scoring Committee is producing a five-part article series. The series is designed to provide the mortgage lending industry, and concerned groups and individuals, the opportunity to present their perspectives on credit ...
Journal Article
Mining data
Working Paper
Credit scoring and the availability, price, and risk of small business credit
The authors examine the economic effects of small business credit scoring (SBCS) and find that it is associated with expanded quantities, higher average prices, and greater risk levels for small business credits under $100,000. These findings are consistent with a net increase in lending to relatively risky ?marginal borrowers? who would otherwise not receive credit, but who would pay relatively high prices when they are funded. The authors also find that 1) bank-specific and industrywide learning curves are important; 2) SBCS effects differ for banks that adhere to ?rules? versus ...
Journal Article
What's the point of credit scoring?
Credit scoring is already widely used for consumer lending and is becoming more commonly used in mortgage lending. Now, small business lending is getting into the scoring act. What does this mean for the commercial loan industry? And will it benefit small businesses? In this article, Loretta Mester explains the basics of credit scoring, discusses some of the models used, and looks at some of the implications of the wider use of credit scoring.
Conference Paper
The small business lending relationship: session A