publication . Report . Article . Preprint . 2013

Congressional Influence as a Determinant of Subprime Lending

Stuart A. Gabriel; Matthew E. Kahn; Ryan K. Vaughn;
Open Access
  • Published: 01 Apr 2013
  • Publisher: National Bureau of Economic Research
Abstract
We apply unique loan level data from New Century Financial Corporation, a major subprime lender, to explore whether attributes and committee assignments of Congressional Representatives were associated with access to and pricing of subprime mortgage credit. Research findings indicate enhanced credit access at discounted prices among borrowers represented by Congressional leaders and by members of the House Financial Services Committee. Black borrowers in districts represented by Congressional leaders also were more likely to obtain subprime mortgage credit. We do not find evidence of adverse performance differentials among the politically directed loans. Our res...
Subjects
free text keywords: Finance, business.industry, business, Economics, Political geography, Subprime crisis, Microeconomics, Level data, Subprime lending, Corporation, Financial services, Preferential treatment, Loan, Economics and Econometrics, jel:G21, jel:R21

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publication . Report . Article . Preprint . 2013

Congressional Influence as a Determinant of Subprime Lending

Stuart A. Gabriel; Matthew E. Kahn; Ryan K. Vaughn;