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Report
Payday holiday: how households fare after payday credit bans
Payday loans are widely condemned as a ?predatory debt trap.? We test that claim by researching how households in Georgia and North Carolina have fared since those states banned payday loans in May 2004 and December 2005. Compared with households in all other states, households in Georgia have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate. North Carolina households have fared about the same. This negative correlation?reduced payday credit supply, increased credit ...
Journal Article
Helping the poor accumulate assets
Having assets (a bank account, a car, an insured home, a good credit rating) does more than help families weather a crisis. It can move them out of poverty permanently, with benefits to individuals, government, corporations, and society as a whole.
Journal Article
A look at household bankruptcies
In recent years, a record number of U.S. households have declared bankruptcy. This article explores the possible causes and potential effects of the rising rate of insolvent households.
Journal Article
Personal on-line payments
The swift growth of e-commerce and the Internet has led to the development of a new form of electronic funds transfer?the personal on-line payment?that uses web and e-mail technologies to initiate and confirm payments. This article describes this payment instrument and the trends that have given rise to it. The authors explain that personal on-line payment systems are already providing a convenient alternative to checks, money orders, and cash, and may replace credit cards for some small-scale retail e-commerce. However, issues such as the interoperability of diverse systems and the systems? ...
Journal Article
Asset building and the wealth gap
Building and maintaining financial security is increasingly difficult for a growing portion of American households. Wealth is less prevalent in middle-class households and increasing among the already well-to-do. At the same time, poverty is growing and concentrating disproportionately among the nonwhite population. As the cost of living outpaces income and wealth accumulation, a majority of U.S. households are ill-prepared for financial emergencies or retirement.
Conference Paper
The macroeconomic transition to high household debt
Aggressive deregulation of the household debt market in the early 1980s triggered innovations that greatly reduced the required home equity of U.S. households, allowing them to cash-out a large part of accumulated equity. In 1982, home equity equaled 71 percent of GDP; so this generated a borrowing shock of huge macroeconomic proportions. The combination of increasing household debt from 43 to 56 percent of GDP with high interest rates during the 1982-1990 period is consistent with such a shock to households? demand for funds. This paper uses a quantitative general equilibrium model of ...
Working Paper
Is technology-enhanced credit counseling as effective as in-person delivery?
This paper compares outcomes for borrowers who received face-to-face credit counseling with similarly situated consumers who opted for counseling via the telephone or Internet. Counseling outcomes are measured using consumer credit report attributes one or more years following the original counseling. The primary analysis uses data from a sample of 26,000 consumers who received credit counseling either in-person or via the telephone during 2003. A second sample of 12,000 clients counseled in 2005 and 2006 was provided by one of the agencies to examine Internet delivery. Technology-assisted ...
Journal Article
Financial literacy: an overview of practice, research, and policy
Attention to financial literacy has grown in recent years, in large part because technological, market, and legislative changes have resulted in a more complex financial services industry that requires consumers to be more actively involved in managing their finances. Consumer and community interest groups, banking companies, government agencies, and policymakers, among others, have become concerned that many consumers lack a working knowledge of financial concepts and the tools they need to make decisions most advantageous to their economic well-being. As a result, considerable resources ...
Journal Article
Personal bankruptcy: the new American pastime?
This year has been a great one for major league baseball. In the game of personal finances, however, it's been a bust. Why are so many Americans swinging for the fences, but whiffing instead?
Journal Article
Spotlight: Financial services: Banking within reach of more Mexicans
In 2008-09, Mexico was wracked by the global financial crisis, suffering its largest one-year economic contraction since at least the 1930s. But the banking sector withstood the shock and made important strides in one area--bringing previously unbanked households into the financial system. Boosting Mexico's economic development by helping small businesses fulfill their potential depends on improving access to finance and fully linking these engines of economic growth and opportunity to the formal economy.