The U.S. subprime mortgage market - do we need more restrictions?

It is certainly too early to assess the extent of the mortgage crisis in the U.S., but perhaps we can turn to history to see which policies have worked to protect subprime borrowers from loan sharks.

A recent paper compares states and counties with different anti-predatory lending laws. While a more generous definition of what constitutes a sub-prime borrower seems to help, more restrictions on lending terms appear to have an opposite effect. Bottom line, the devil is in the details. Food for thought for today's policy makers.