Spillover effects of financial deregulation: The unintended consequences of the OCC preemption rule on mortgage lending practices
研究了2004年OCC优先规则如何导致国家银行在反掠夺性贷款法州降低收入要求2.5%并增加抵押贷款供给6.7%，以及通过竞争加剧非银行和次贷机构的收入虚报问题。
In 2004, the Office of the Comptroller of the Currency (OCC) adopted a preemption rule that clarified and codified the preemption standards applicable to national banks. This study investigates the impact of the federal preemption of state anti-predatory lending (APL) laws on the lending practices of national banks in the home mortgage market and the overstatement of buyer income on mortgages originated by other lending institutions before the 2008 crisis. Utilizing a triple-difference approach, we find that the rule led to OCC-regulated lenders decreasing income requirements by 2.5% and increasing mortgage supply by 6.7% in states with APL laws. Furthermore, our results indicate that the expansion of OCC lenders following the preemption rule exacerbated the issue of income overstatement on mortgages originated by nonbanks and subprime lenders through the channel of competition. Our research highlights the potential unintended consequences of financial deregulation, emphasizing the need for careful consideration of regulatory changes on market dynamics and financial stability. • Several states passed anti-predatory lending laws (APL) in the early 2000s to protect consumers. • However, in 2004, the Office of the Comptroller of the Currency (OCC) issued regulations preempting state APL laws. • We examine the impact of the OCC Preemption Rule on Mortgage Lending Practices. • Econometric analysis based a sample of over 12 million loans originated across 43 states before the 2008 crisis. • Preemption led to a decrease in income requirement by 2.5% and an increase in mortgage supply by 6.7% in states with APL laws.