Recent Developments in Consumer Credit and Payments

In his opening remarks at the conference, Charles Plosser, president of the Federal Reserve Bank of Philadelphia, noted that innovation in electronic payments has led to major changes in the financial industry. The process of innovation has allowed new entrants into the industry, expanding the availability of consumer credit and permitting more opportunities for smoothing consumption over time. Plosser reminded conference participants that rapid growth in inn September 20-21, 2007, the Research Department and the Payment Cards Center of the Federal Reserve Bank of Philadelphia held their fourth joint conference to present and discuss the latest research on consumer credit payments. Approximately 75 participants attended the conference, which included six research papers on topics such as liquidity constraints, the rise in bankruptcy, and the financial mistakes made by credit card holders. In this article, Mitchell Berlin summarizes the papers presented at the conference.