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The Geography Of Fringe Banking

Author

Listed:
  • Anping Chen
  • Marlon Boarnet
  • Mark Partridge
  • Christopher S. Fowler
  • Jane K. Cover
  • Rachel Garshick Kleit

Abstract

type="main"> U.S. financial services are bifurcated into a traditional banking sector that serves wealthier individuals and a less regulated alternative financial services sector (payday lenders, check cashers, etc.) catering to lower income individuals. What determines the spatial distribution of fringe banks? First, at the county level, fringe banks do not fill a spatial void in traditional services. Second, whether fringe providers disproportionately locate in counties with more minorities depends on the service and the minority population. Finally, pawnshop prevalence is shaped by restrictions on interest and fees, but the location of payday lenders and check cashers is not sensitive to such regulation.

Suggested Citation

  • Anping Chen & Marlon Boarnet & Mark Partridge & Christopher S. Fowler & Jane K. Cover & Rachel Garshick Kleit, 2014. "The Geography Of Fringe Banking," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 688-710, September.
    • Handle: RePEc:bla:jregsc:v:54:y:2014:i:4:p:688-710
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    References listed on IDEAS

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    Cited by:

    1. Scott W. Hegerty, 2016. "Commercial bank locations and “banking deserts”: a statistical analysis of Milwaukee and Buffalo," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 253-271, January.
    2. Eoin McLaughlin & Rowena Pecchenino, 2022. "Fringe banking and financialization: Pawnbroking in pre‐famine and famine Ireland," Economic History Review, Economic History Society, vol. 75(3), pages 903-931, August.
    3. Hyoung Jun Kim & Bo Kyeong Lee & So Young Sohn, 2020. "Comparing spatial patterns of sole proprietorship and corporate payday lenders in Seoul, Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 215-236, February.
    4. Terri Friedline & Zibei Chen, 2021. "Digital redlining and the fintech marketplace: Evidence from US zip codes," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 366-388, June.
    5. Zibei Chen & Terri Friedline & Catherine M. Lemieux, 2022. "A National Examination on Payday Loan Use and Financial Well-being: a propensity score matching Approach," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 678-689, December.
    6. Goodstein, Ryan M. & Rhine, Sherrie L.W., 2017. "The effects of bank and nonbank provider locations on household use of financial transaction services," Journal of Banking & Finance, Elsevier, vol. 78(C), pages 91-107.
    7. Scott W. Hegerty, 2021. "Bank Density, Population Density, and Economic Deprivation Across the United States," Papers 2105.07823, arXiv.org.
    8. Pankaj Kumar Maskara & Emre Kuvvet & Gengxuan Chen, 2021. "The role of P2P platforms in enhancing financial inclusion in the United States: An analysis of peer‐to‐peer lending across the rural–urban divide," Financial Management, Financial Management Association International, vol. 50(3), pages 747-774, September.
    9. Scott W. Hegerty, 2022. "Banking Deserts," City Size, and Socioeconomic Characteristics in Medium and Large U.S. Cities," Papers 2203.03069, arXiv.org.
    10. Megan Doherty Bea & K. Bley, 2022. "(Un)conditional consumer protections in high‐cost lending regulation: Impacts on local lending geographies," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1561-1596, December.
    11. Ian Dunham & Alec Foster, 2023. "FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 47(6), pages 881-898, November.
    12. Katharina Allinger & Elisabeth Beckmann, 2021. "Prevalence and determinants of nonbank borrowing in CESEE: evidence from the OeNB Euro Survey," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/21, pages 7-35.
    13. Scott Hegerty, 2016. "Commercial bank locations and “banking deserts”: a statistical analysis of Milwaukee and Buffalo," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 253-271, January.
    14. Megan Doherty Bea, 2023. "Relational foundations of an unequal consumer credit market: Symbiotic ties between banks and payday lenders," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 320-345, January.
    15. Craig Gundersen & David R. Just & Katie Fitzpatrick, 2017. "Bank Accounts, Nonbank Financial Transaction Products, and Food Insecurity among Households with Children," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(3), pages 631-658, November.
    16. Anne Fitzpatrick & Katie Fitzpatrick, 2021. "Health insurance transitions and use of fringe banks: Evidence from the Affordable Care Act," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 557-572, July.

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