Household access to consumer credit in low- and moderate-income areas and banking deserts

There is a lot of policy interest in the issue of household access to consumer credit in low and moderate income (LMI) and so-called banking desert areas. Under the Community Reinvestment Act, bank regulators also devote a lot of resources to this issue. LMI areas are census tracts with median family income less than 80% of the relevant metro area or district. Banking deserts are counties with no bank or credit union branches. We examine access to consumer credit in these areas using a representative 5% sample of credit records and both regression discontinuity design (RDD) and matching estimators of the average treatment effect on the treated (ATT). The RDD results are local; for example, they apply close to an 80% median family income boundary for an LMI designation. The matching results apply more generally, albeit to areas with reasonable overlap in propensity scores, etc. Using both approaches, we find little support for the claim that households in LMI and banking desert areas face reduced access to consumer credit.