Muni Bondholders in Dark as Borrowers Shirk Loan Disclosure Rule

Private lending to U.S. states and cities has more than doubled over the past decade. But bondholders aren’t being told of the risks.

Between 50% to 80% of such loans aren’t disclosed to bondholders despite regulations enacted in 2019 that required them to be reported in securities filings, according to a study co-authored by a senior economist at the Federal Reserve, which was presented last week at the Brookings Institution’s 10th annual Municipal Finance Conference. The paper compared loans disclosed through the Municipal Securities Rulemaking Board’s system with confidential loan data reported to the Fed by the 37 largest U.S. ...