A Practitioner’s View on the Value of Team-Based, Student-Powered Interdisciplinary Research

By Joseph A. Smith, Jr., former North Carolina Commissioner of Banks 

 In February 2022 we are featuring Bass Connections as part of an exploration of research that crosses boundaries. In this post Mr. Smith describes a project conducted with Bass Connections.

Joseph Smith (left) with members of the American Predatory Lending team in 2019

Over the last two plus years, I have been one of the senior leads of a Bass Connections project entitled “American Predatory Lending and the Global Financial Crisis,” the goal of which is to review and analyze the debate over state laws that sought to address alleged abuses in the subprime mortgage market.  I was North Carolina Commissioner of Banks during the period under study (1999 – 2007), so I have opinions on this topic and knowledge about how these laws were implemented.  Even so, I have questions about why the debate did not alert Federal policy makers and industry leaders to the market meltdown and financial crisis that were to come.  The APL project has allowed me to reflect on the predatory lending debate with the benefit of historical perspective (ok, hindsight).  More importantly, it has allowed me to view the period under study through the eyes of a group of extraordinary young people.   

The APL team over the course of the project has been made up mainly of undergraduates, with a few grad students, law students and MBA candidates thrown in for good measure.  So, most of the team members were either unborn or very young during the period under study.  A number recalled discussions of the mortgage meltdown or financial crisis with their parents.  All want to understand why these events occurred.  Our discussions of these matters have been enriched by the contributions of international students, who have brought new perspectives and concerns.   

 Given the clean slate with which we are working, the team had to start by defining with precision what we are talking about.  What makes a mortgage “subprime?”  What features of a loan would make it “predatory?”  What did the mortgage markets look like before state-level legislation was enacted and what impact did those laws have, given the constraints of national policies about the operation of the financial sector?  What did state governments do to police the market under the new legislation and what was the effect of that regulation?  For me, this work has been a rewarding test of my pre-existing opinions (or, if you prefer, biases) and a pathway to new insights.  Old dogs, apparently, can learn new tricks.  

While the conceptual work just mentioned is important and significant, I have been especially impressed by key dimensions of the research that the students have undertaken.  Our oral history sub-teams have conducted over 80 interviews with participants in the predatory lending debates from all sides of the issue: advocates, government officials and mortgage industry folks.  The interviews have been conducted under university protocols and are always preceded by careful background research and preparation.  I have received compliments from a number of interviewees about how impressed they were with our students and how satisfied they were that they had been fairly treated.  In an era when few people keep diaries and personal letters and papers are often subject to corporate or governmental “document management” protocols, it’s great to know that Duke will have an oral history archive on the predatory lending issue that will be available to researchers, journalists and interested citizens. 

Another impressive aspect of the APL project has been the work of our data analysis sub-teams: ranging from “word cloud” analyses of blogposts and publications during the period under study, to the studies of the structure of mortgage markets in North Carolina and other states, to delinquency rates for various categories of mortgage loans, to analysis and comparison of mortgage enforcement orders in several states.  The last of these endeavors (analysis of mortgage enforcement orders) included those issued under North Carolina Commissioner of Banks Joseph A. Smith, Jr., an interesting and somewhat terrifying trip down Memory Lane.  These studies have been ambitious, high-quality, and surprisingly sophisticated for young researchers.  And they have been accompanied by detailed protocol papers that will be a valuable aid to future researchers.    

As the APL project enters its final phase, I am gratified by what our team has accomplished.  It has created, presented and preserved a valuable archive of information and analysis on a very important topic.  I am also somewhat wistful that I won’t be engaged with students in this important work after the project ends. Their enthusiasm, energy, and intelligence have been a source of continual astonishment to me and of hope for the future.  I will miss them.