Jen Brown and Mark Jansen. 2024. “The Intended and Unintended Consequences of Consumer Protection Laws: An Analysis of Wage Garnishment and Usury Limits in Auto Lending”
ABSTRACT: We use novel auto financing data to examine the relation between consumer protection laws and vehicle prices, loan terms, and outcomes for subprime borrowers. After accounting for borrower creditworthiness, purchase timing, and vehicle quality, we find that state laws prohibiting post-default wage garnishment are associated with higher prices, higher initial principal balances, and higher default rates. We find that default rates are lower among borrowers who cannot discharge their debts due to a recent Chapter 7 bankruptcy, suggesting moral hazard as a plausible explanation for the higher default rates in states that prohibit wage garnishment. We find no evidence that usury laws, which cap interest rates for high-risk borrowers, are associated with higher prices or default rates. We summarize our findings in terms of the distributional consequences of consumer protection laws.
Jen Brown and Dylan Minor. 2015. “Misconduct in Financial Services: Differences across Organizations”
ABSTRACT: We examine misconduct in financial services. We propose a theory in which experts extract surplus based on the value of their firm’s brand and their own skills. Using sales complaint data for insurance agents, we find that agents working exclusively for large branded firms are more likely to be the subject of justified sales complaints, relative to smaller independent experts, despite doing substantially less business. In addition, more experienced experts attract more complaints per year.
Retired working paper: Jen Brown and Jin Li. July 2010. “Going for it: The Adoption of Risky Strategies in Tournaments.”