Allison Nicoletti

Allison Nicoletti and Christina Zhu (Working), Economic Consequences of Transparency Regulation: Evidence from Bank Mortgage Lending.

Abstract: We examine the economic consequences of a rule designed to improve consumers' understanding of mortgage information. The 2015 TILA-RESPA Integrated Disclosures (TRID) rule simplifies the disclosures provided to consumers, reducing their information processing costs and increasing lenders' compliance-related frictions. We posit that TRID-affected mortgages become less attractive to lenders as an investment opportunity. Our main results document that mortgage applications affected by TRID are less likely to be approved following the rule's effective date. We document evidence consistent with both a decrease in consumers' information costs and an increase in compliance-related frictions faced by lenders, providing insight into the potential channels through which this reduction in mortgage credit operates. We also find that banks partially compensate for reduced mortgage lending by increasing small business lending. Additional analyses suggest positive consequences for some consumers and negative consequences for others. Our study provides a better understanding of the broader economic consequences of transparency regulation for both the regulated firms and consumers, and provides a complementary perspective to the literature examining bank-level transparency in lending markets.

Christopher Armstrong, Allison Nicoletti, Frank Zhou (2021), Executive stock options and systemic risk, Journal of Financial Economics.

Hailey Ballew, Allison Nicoletti, Sarah Stuber (2021), The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking, Management Science.

Matthew Beck, Allison Nicoletti, Sarah Stuber (2021), The Role of Audit Firms in Spreading Depositor Contagion, The Accounting Review.

Hailey Ballew, Michael Iselin, Allison Nicoletti (2021), Accounting-based thresholds and growth decisions in the banking industry, Review of Accounting Studies.

Allison Nicoletti (2018), The effects of bank regulators and external auditors on loan loss provisions, Journal of Accounting and Economics, 66 (1).

Michael Iselin and Allison Nicoletti (2017), The Effects of SFAS 157 Disclosures on Investment Decisions, Journal of Accounting and Economics, 63 (2-3), pp. 404-427.