nonPrime101 Presents at BLS Workshop in Washington, D.C.

Re-examination of Ability-to-Pay Model Yields New Conclusions

By: Heather Lamoureux

Last month, on behalf of nonPrime101, I had the opportunity to speak at the Consumer Expenditure Surveys (CE) Microdata Users’ Workshop, held in Washington D.C. at the Bureau of Labor Statistics (BLS). My presentation, “Ability-to-Pay: Using CE Microdata to Proxy Borrower Expenses,” assessed the Ability-to-Pay model used in the Consumer Financial Protection Bureau’s proposed regulations. By cross-referencing Clarity data with CE microdata, we were able to model the effects of the would-be regulations. We found that 90.5% of all single pay loans would be banned if the CFPB were to implement the Ability-to-Pay requirement in the market. That’s compared to the 60 to 82 percent loan volume reduction estimated by the CFPB. All of these findings are explained in Report 9.

You may be familiar with the BLS as the agency that publishes our monthly unemployment numbers. The Consumer Expenditure Surveys program provides detailed data on expenditures, income, and demographics of US consumers. The agency’s annual gathering focuses on teaching users how to understand the structure of CE microdata, as well as promoting awareness of the different ways CE data is used. In attendance were economists, researchers, and academics from organizations such as the BLS, Census Bureau, and George Washington University.

The keen attention to detail and inviting presence of the BLS gave attendees a sense that our participation truly contributed to the workshop’s success. Overall, the presentation was well received by the audience – so much so that we will return next year.

I’m looking forward to presenting new findings!

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