# Professor Johannes Stroebel's research finds that lower-priced capital has not resulted in increased lending to borrowers with low FICO scores

1 Faculty News September 22, 2015 ![Politico logo](/sites/default/files/styles/246w/public/assets/images/con_033212.jpg?itok=KdEAbjwV)>

Excerpt from [Politico](http://www.politico.com/tipsheets/morning-money/2015/09/2015-09-22-pro-morning-money-210319) -- "Households with the lowest FICO scores had the highest willingness to borrow. Despite lower-cost capital, banks were reluctant to lend to these potential borrowers. The authors estimate that a one percentage point reduction in the costs of funds for banks raises optimal credit limits by only $127 for consumers with low FICO scores. … A bank’s propensity to lend is negatively correlated with a household’s propensity to borrow (i.e., the more likely a household is to borrow, the less likely a bank is to grant additional credit)."

[Read more](http://www.politico.com/tipsheets/morning-money/2015/09/2015-09-22-pro-morning-money-210319)