Staff Reports
Does CFPB Oversight Crimp Credit?
Number 857
June 2018 July 2023

JEL classification: D18, G21, G28

Authors: Andreas Fuster, Matthew C. Plosser, and James Vickery

We study how regulatory oversight by the Consumer Financial Protection Bureau (CFPB) affects mortgage credit supply and other aspects of bank behavior. We use a difference-in-differences approach exploiting changes in regulatory intensity and a size cutoff, below which banks are exempt from CFPB scrutiny. CFPB oversight leads to a reduction in lending in the Federal Housing Administration (FHA) market, which primarily serves riskier borrowers. However, it is also associated with a lower transition probability from moderate to serious delinquency, suggesting that tighter regulatory oversight may reduce foreclosures. Our results underscore the trade-off between protecting borrowers and maintaining access to credit.

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Author Disclosure Statement(s)
Andreas Fuster
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Matthew Plosser
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

James Vickery
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.
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