Subprime Lending and Alternative Financial Service Providers: A Literature Review and Empirical Analysis
AbstractThe last two decades have been marked by significant changes in consumer financial services. Two significant changes that have been evident are the rapid growth of both subprime mortgage lending and alternative financial service providers (AFSPs), such as check cashers, payday lenders, and pawnshops. A common concern with both of these industries is high fees for their services and disproportionate targeting of low-income and minority households. Another common element regarding these trends is the variety of studies arguing that the growth in use of these higher-cost financial services in low-income and minority communities is due in part to the absence of banks from these areas. But while much has been written in recent years on the growth of these two segments of the financial services market, there is limited research on the extent to which these phenomena are related. The purpose of this study is to examine subprime lending and the prevalence of AFSPs through a common lens to investigate the extent of similarities and differences in the prevalence of these activities in low-income and minority communities.
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Bibliographic InfoPaper provided by HUD USER, Economic Development in its series Economic Development Publications with number 39088.
Length: 186 pages
Date of creation: Mar 2006
Date of revision:
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-21 (All new papers)
- NEP-BAN-2007-04-21 (Banking)
- NEP-URE-2007-04-21 (Urban & Real Estate Economics)
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