About Me
Hello! And welcome to my personal website! I'm a senior economist at the Consumer Financial Protection Bureau. Like all of us at the CFPB, I specialize in household finance. I have spent most of my time on mortgages and auto loans, but I've worked on a bunch of other topics ranging from overdraft and deposit advance products to the LIBOR transition. In my work I've been fortunate to analyze some incredibly innovative datasets, both for academic research and for policy work like rulemakings and public-facing reports. You can find some of my public work below. Please feel free to reach out at: david.low@cfpb.gov or low.david.chester@gmail.com.
Academic Working Papers
Expense Shocks Matter
Household liquidity shocks have major implications for many topics in economics. As a result, income shocks have been extensively studied, but expense shocks are usually neglected because they are hard to quantify. We use a survey linked to credit bureau records to measure the frequency, size, and financial implications of expense shocks.
An Empirically-Disciplined Theory of Mortgage Default
Revised and resubmitted to Review of Financial Studies
This paper develops the first structural model of mortgage default in which, as in the data, abovewater default is surprisingly common while underwater default is surprisingly rare. Matching these facts has major policy implications and helps resolve several puzzles in the literature.
What Triggers Mortgage Default? New Evidence from Linked Administrative and Survey Data
Accepted at The Review of Economics and Statistics
This paper studies why homeowners default on mortgages using a survey specifically designed for the purpose. I find that "strategic" default with no liquidity trigger is much less common than it appears in other datasets. But as in other datasets, I still find that many foreclosures are not triggered by negative home equity, contrary to the predictions of almost every model in the literature.
Auto Dealer Loan Intermediation: Consumer Behavior and Competitive Effects
Revise and resubmit at The American Economic Review
This paper studies the intermediation of auto loans through auto dealers using new and comprehensive administrative data. We explore counterfactuals where dealers have no discretion to price loans and final rates are set by lenders instead. We find large gains in consumer surplus from such a policy.
Measuring the "World" Real Interest Rate
This note computes a measure of the "world" real interest rate and, where possible, a measure of the implied future real rate. It also makes public our estimates of the "world" real interest rate so they can be used by other researchers.
CFPB Reports & Public Research
Examining the potential impact of high vehicle costs on Americans with deep subprime credit scores
The dramatic increase in vehicle prices during the COVID pandemic appears to have priced many deep subprime borrowers out of the market.
Subprime Auto Loan Outcomes by Lender Type
This report examines how much of the variation in interest rates among subprime auto loans can be explained by differences in default rates. We find that differences in default rates could explain some of the average differences in interest rates across lender types, but cannot explain all of the average differences. These results mean that differences in default risk alone are unlikely to fully explain differences in interest rates charged by different types of auto lenders.
Characteristics of Mortgage Borrowers During the COVID-19 Pandemic
This report explores the characteristics, including demographics, of mortgage borrowers in forbearance or delinquent during the COVID-19 pandemic. The data show that a significant share of these borrowers were minorities, lived in majority-minority tracts, and lived in relatively lower-income areas.
Frequent Overdrafters
This Data Point focuses on checking accounts with frequent overdrafts or NSFs. We find that frequent overdrafters account for nine percent of all accounts but paid 79 percent of all overdraft and NSF fees. Frequent overdrafters tend to be more credit constrained than non-overdrafters or infrequent overdrafters.