Landscapes of Predation, Landscapes of Neglect: A Location Analysis of Payday Lenders and Banks

Graves, Steven M.

doi:10.1111/0033-0124.5503017

Cited by 137 publications

(13 citation statements)

References 26 publications

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“…Sawyer and Temkin, 2004; Nguyen, 2015; Hegerty, 2016; 2019; Dahl and Franke, 2017); (2) the disproportionate presence of alternative financial services in neighborhoods (e.g. Graves, 2003; Evren, 2009; Fowler et al ., 2014; Prager, 2014; Faber, 2018); and (3) the spatial location patterns of alternative financial services relative to mainstream banks (e.g. Burkey and Simkins, 2004; Smith et al ., 2008; Wheatley, 2010; Smith et al ., 2013; Barth et al ., 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

“…At the neighborhood level, concerns are raised about disparate risks and their implications for financial exclusion for specific, vulnerable segments of society (Apgar and Herbert, 2006). This body of research cumulatively acknowledges that unevenness in the spatial distribution of financial services is related to community economic distress, as both an indicator and an exacerbating factor (Graves, 2003; Gallmeyer and Roberts, 2009; Cover et al ., 2011; Kubrin and Hipp, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Existing academic research has also explored the proliferation of the AFSP industry and the resulting implications (e.g. Caskey, 1994; 2005; Graves, 2003; Evren, 2009; Fowler et al ., 2014; Prager, 2014; Faber, 2018). From the 1990s onward, there has been considerable growth in the alternative finance or ‘fringe’ financial industry (Caskey, 1994; 2005; Burton et al ., 2004; Langley, 2008; Aitken, 2013; Birkenmaier and Fu, 2016; Rowlingson et al ., 2016; Faber, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

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FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities

Dunham¹,

Foster²

2023

Int J Urban Regional Res

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Access to safe and affordable financial services is essential to the economic well‐being of individual households and entire urban neighborhoods. However, prior research raises concerns about spatial inequities in the distribution of brick‐and‐mortar financial services offerings—either mainstream financial institutions or alternative ‘fringe’ financial service providers—and the resulting implications for financial inclusion and social justice. This study uses a novel method to identify fringe financial ecologies that captures the recent tandem processes of abandonment by mainstream financial institutions and the proliferation of alternative financial service providers. We explore how fringe financial ecologies potentially overlap existing inequalities of race, class and subprime mortgage lending in two US metropolitan areas, Los Angeles, California, and Miami, Florida. Our results raise concerns that communities of color, low‐income neighborhoods and otherwise vulnerable segments of the population are disproportionately at risk of both financial exclusion and predatory targeting. We find that fringe financial ecologies are associated with a high prevalence of subprime mortgage lending. The results advance an understanding of financial ecologies that raises awareness about place‐based financial exclusion as a form of systemic racism in the broader context of the national reckoning with racial justice in the US.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities

Dunham¹,

Foster²

2023

Int J Urban Regional Res

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“…Geographic evaluations often jointly examine bank branch and payday storefront location choices to better understand inequalities in access to consumer credit. Studies confirm that, compared to bank locations, payday lenders are more likely to locate in or near predominately Black and Latino communities and communities that have lower incomes and higher poverty rates, on average (Burkey & Simkins, 2004; Damar, 2010; Faber, 2019; Graves, 2003; Prager, 2014; Small et al, 2021). This unequal access has consequences for consumers: households with proximate access to payday lenders are more likely to use those services (Friedline & Kepple, 2017; Goodstein & Rhine, 2017), and proximate access has been shown to negatively impact social and economic well‐being (e.g., Melzer, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…For example, in the predatory inclusion framework, banks exclude certain consumers, and separately, payday lenders see an opportunity to target those same consumers (Charron‐Chénier, 2020). Similarly, some narrative explanations of diverging spatial patterns of banks and payday lenders posit that banks first neglect certain communities, and then payday lenders move in to those communities (e.g., Graves, 2003). Even the language used in many studies (and in policy spheres) reifies a supposed dichotomy between the institutions, with payday lenders referred to as “alternative” or “fringe” and banks as “mainstream” services.…”

Section: Literature Reviewmentioning

confidence: 99%

Relational foundations of an unequal consumer credit market: Symbiotic ties between banks and payday lenders

Bea

2022

Journal of Consumer Affairs

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Structural Barriers, Financial Exclusion, and the Possibilities of Situated Learning for Financial Education

Buckland

2014

New Dir Adult Contin Educ

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A financial educator is discussing payday lending and similar types of financial services available in the low-income neighborhood in which her group of adult learners lives. During that presentation, she explains that a few years ago she got one of those quick, tax refund loans that are offered by tax preparers during tax season, a financial tool similar to payday loans. She describes how happy she was to have her expected tax return money in her hand that same day. It wasn't until she actually received her refund that she read the fine print and realized that the interest rate on the tax loan was approximately 300%, a rate similar to payday loans. Her cautionary story was not only useful in connecting with the students on a personal level but also in describing the pitfalls of these services that result from financial exclusion.Financial exclusion is a particular kind of socioeconomic exclusion that can create structural barriers that can then reinforce poverty. It is a situation more common among low-income people who lack access to mainstream banks and instead rely on fringe banks such as payday lenders, check cashers, and rent-to-own shops for their banking needs, which are expensive and poorly regulated. Opportunities for growing insights into and learning about one' s finances are also limited because these services are purely transactional and do not support steps toward overall financial health, such as learning about savings and credit establishment. This chapter begins by providing an overview of how financial exclusion works, and then discusses some of the premises of financial literacy. Situated learning theory as applied to financial literacy is discussed next, and argues that without supportive relationships, community, and tools to build one' s finances, financial learning opportunities are minimal. The chapter ends with a consideration of conclusions and implications.

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Landscapes of Predation, Landscapes of Neglect: A Location Analysis of Payday Lenders and Banks

Cited by 137 publications

References 26 publications

FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities

FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities

Relational foundations of an unequal consumer credit market: Symbiotic ties between banks and payday lenders

Structural Barriers, Financial Exclusion, and the Possibilities of Situated Learning for Financial Education

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