Politicizing Consumer Credit

Powerful politicians can interfere with the enforcement of regulations. As such, expected political interference can affect constituents’ behavior. Using rotations of Senate committee chairs to identify variation in political power and expected regulatory relief, we study powerful politicians’ effect on consumer lending to communities protected by fair-lending regulations. We find a 7.5% reduction in credit access to minority neighborhoods in states with new committee chairs. Larger reductions occur in Community Reinvestment Act-eligible neighborhoods and when Senators serve on committees that oversee the enforcement of fair-lending laws. Banks headquartered in powerful Senators’ states are responsible for the reduction in credit access.

© This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/



Work Title Politicizing Consumer Credit
Open Access
  1. Pat Akey
  2. Rawley Z. Heimer
  3. Stefan Lewellen
License CC BY-NC-ND 4.0 (Attribution-NonCommercial-NoDerivatives)
Work Type Article
  1. Elsevier BV
Publication Date February 2021
Publisher Identifier (DOI)
  1. 10.1016/j.jfineco.2020.07.017
  1. Journal of Financial Economics
Deposited February 23, 2022




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Work History

Version 1

  • Created
  • Added pol_credit_Final_combined-1.pdf
  • Added Creator Pat Akey
  • Added Creator Rawley Z. Heimer
  • Added Creator Stefan Lewellen
  • Published
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