Working Papers

1. Public Information, Private Expertise, and Lender Specialization
   [PDF] — Under Review
   [Show Abstract]

   Why do lenders specialize in specific industries rather than diversify? Exploiting the SBA's 2014 credit-scoring mandate, which applied to most guaranteed loans but left one program exempt, I show that standardized scores reduced specialization by 12.7 percent as lenders entered new sectors and reallocated portfolios. Yet public information crowds out private expertise: in previously specialized industries, post-reform defaults rise by 11 percent of the pre-policy rate while competitive entry holds spreads flat. A Bartik shift-share IV confirms that remaining specialization causally lowers defaults, deepens repeat borrowing, and reduces spreads for repeat borrowers, reflecting informational complementarities rather than hold-up.

   Presented at: EFA 2026 (Doctoral Tutorial), FIRS 2026 (Ph.D. Student Sessions), FMA 2025, LaBS International Banking Workshop 2025, UDel–Philadelphia Fed Fintech Conference 2025 (poster), Baruch College & The Graduate Center, CUNY Brown Bag Seminars 2025

2. When the Home Is Out of Reach: Collateral Choice and the Reconstruction of Recovery
   with Linda Allen and Fabrice Tourre
   [Show Abstract]

   We study how lenders reallocate recovery effort across collateral margins when regulation replaces discretion with standardized rules. A 2014 SBA reform increased the recognized value of business collateral relative to expected liquidation recovery, creating a gap between regulatory compliance and default recovery. Using UCC filings and real-estate lien records, we show that lenders adjust collateral structure in response to this gap. In states where homestead exemptions make owner home equity less reachable, lenders increase asset-specific documentation of movable collateral and are more likely to obtain voluntary liens on home equity. Where home equity remains more reachable, lenders instead tilt toward borrowers whose collateral portfolios include more readily pledgeable real estate, such as commercial property. The results show that debtor protections shape how lenders target and document collateral under standardized valuation rules.

   Presented at: Baruch College Brown Bag Seminar 2026