SMU SOE Seminar Series (December 1, 2023, 4pm-5.30pm): Credit Card Regulations and Consumer Debt

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TOPIC:

CREDIT CARD REGULATIONS AND CONSUMER DEBT

ABSTRACT The unsecured credit market data show that the unsecured debt market has been through some astonishing changes after the Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). In this paper, I use the Survey of Consumer Finances of 2007 to 2019 and find that the total credit lines that the household heads held decreased by 38.5 percent compared with 2007 in 2019. The total credit lines steadily declined using the SCF 2013 and 2016 datasets. During the same period, the average interest rate on the credit card balance that the household heads paid increased by 190 basic points. Using the United States court dataset, The US court data shows that the Chapter 7 bankruptcy rate decreased by 56 percent from 2010 to 2019. The Consumer Financial Protec-on Bureau report shows that the discharge rate on general-purpose credit cards also dropped by 40 percent over the same period in September 2021. These vital changes in the unsecured credit market show that the Credit CARD Act of 2009 may play a significant role in explaining these facts. This paper aims to provide a quantitative model to shed some light to explain these facts and understand the welfare implications of the CARD Act. Click here to view the CV.
		PRESENTER Xuan Tam City University of Hong Kong
		RESEARCH FIELDS Consumer Finance Macroeconomics Computational Economics
		DATE: 1 December 2023 (Friday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903

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