Skip to main content

The Racialized Costs of “Traditional” Banking in Segregated America: Evidence from Entry-Level Checking Accounts

Race and Social Problems volume 12, pages 344–361 (2020)Cite this article

Abstract

A growing body of evidence shows that America’s racial geography shapes access to basic financial services (e.g. banking), highlighting a mechanism connecting segregation to economic vulnerability: spatially organized institutional marginalization.s While the practices and policies of “mainstream” commercial banks are central to this dynamic, the costs they impose on the communities they serve have been understudied. This study leverages survey data from a stratified random sample of 1344 banks across the United States to investigate variation in the costs and fees of entry-level checking accounts at commercial banks. Our evidence shows banks charge more to open and maintain checking accounts in neighborhoods and cities with larger Black and Latinx populations even after controlling for demographic and socioeconomic characteristics as well as market competition. The higher costs of banking imposed on Black and Latinx communities are further compounded by parallel disparities in income. These findings reveal the unequal costs of banking in segregated America.

This is a preview of subscription content, access via your institution.

Access options

Buy single article

Instant access to the full article PDF.

USD 39.95

Price includes VAT (USA)
Tax calculation will be finalised during checkout.

Fig. 1

Notes

  1. While this paper uses the term Latinx to inclusively acknowledge peoples of Latin American origin who do not ascribe to gender binaries, the authors recognize that the term Latinx emerged in the United States context and can represent a form of linguistic imperialism. The authors also recognize the Latine movement that originated within trans and non-binary communities of Latin America as described by Raquel Reichard (2017).

  2. A banking desert refers to a geographic area without bank or credit union branches. Research has measured banking deserts as census tracts that lack any of these financial services within a 10-mile radius from their centers (Morgan et al. 2016).

  3. We excluded credit unions because, unlike banks, they limit services to members based on employer or residency requirements and operate on a cooperative model where members are joint owners. Credit unions are also insured and regulated differently than banks. Most importantly, commercial banks are far more common and hold far more assets than credit unions, highlighting their centrality to shaping financial services environments (CUNA 2018).

  4. The full list of survey questions and response coding schemes is provided in the Appendix.

  5. Karyen Chu and Keith Ernst of the FDIC provided assistance for implementing sample stratification.

  6. Appendix Figure A1 shows a map of the branches in the sample.

  7. Bank main branch address are geocoded to census tracts using ArcGIS 10.

  8. We also explored adding additional measures of socioeconomic status, such as median household income, but doing so caused multicollinearity problems. For example, adding median household income to place-level models resulted in a Variance Inflation Factor (VIF) of 8.92.

  9. In analyses available upon request, we find substantively identical results if we replace the missing values with zeroes.

  10. Survey questions on entry-level checking account costs and fees were placed near the beginning of the survey, helping to ensure that these questions were answered before respondents were fatigued by the survey or interrupted by their job responsibilities.

  11. We identify banks as being community, small, regional, or mega/large/national in size, consistent with FDIC designations.

  12. There were 248 unique job titles recorded for survey respondents within the analytic sample (including spelling variations). For parsimony, we collapse these titles into tellers (56% of respondents), customer service representatives (26%), and other positions (18%).

  13. In models available upon request, we clustered standard errors at the state-level and included quadratic measures of population racial makeup, population density, median rent, and financial service density. The results presented here were substantively identical in these models.

  14. In results available upon request, we also separately estimated the likelihood that banks charged a regular service fee (i.e. with a binary outcome variable and logistic regression) as well as racial disparities in fee size conditional on whether banks charge fees (i.e. with a linear variable and banks without service fees excluded from the sample). These supplemental results strongly support the results presented here. Specifically, banks in communities of color are significantly more likely to charge regular service fees and those fees are larger among the banks that charge them.

  15. In results available upon request, we also estimated a series of models of regular service fees in which we included banks that did not charge fees as zeroes (rather than as missing). These supplemental results strongly support the results presented here. Specifically, even when including banks that charge no regular service fee in statistical estimates, fees are, on average, significantly larger in Black and Latinx communities even after controlling for a wide range of covariates.

  16. Black exposure to Blacks is 45.14, exposure to Asians is 3.68, and exposure to Latinx is 14.65. Corresponding exposure indices for Asians are 8.89, 22.87, and 19.51, while they are 10.48, 5.78, and 46.35 for Latinx. Rather than simply calculating binary exposure measures, we included all four racial groups, so the sum of all exposure indices (including values for the exposure to whites, which are not mentioned here) equals 100 (Reardon 2002).

References

  • Allen, F., & Gale, D. (2004). Competition and financial stability. Journal of Money, Credit, and Banking, 36(3), 453–480.

    Google Scholar 

  • Amel, D. F., Arthor, B. K., & Kevin, B. M. (2008). Banking market definition: Evidence from the survey of consumer finances. Washington, DC: Board of Governors of the Federal Reserve. Retrieved June 29, 2017 from https://www.federalreserve.gov/pubs/feds/2008/200835/200835pap.pdf.

  • Andriotis, A., & Rudegeair, P. (2017). Bank overdraft-fee revenue bounces back. The Wall Street Journal. Retrieved March 16, 2017 from https://www.wsj.com/articles/bank-overdraft-fee-revenue-bounces-back-1489656603.

  • Baradaran, M. (2015). How the other half banks. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Baradaran, M. (2017). The color of money: Black banks and the racial wealth gap. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Bates, T., & Robb, A. (2016). Impacts of owner race and geographic context on access to small-business financing. Economic Development Quarterly, 30(2), 159–170. https://doi.org/10.1177/0891242415620484.

    Article  Google Scholar 

  • Baviskar, S., & Winter, S. (2017). Street-level bureaucrats as individual policymakers: The relationship between attitudes and coping behavior toward vulnerable children and youth. International Public Management Journal, 20(2), 316–353.

    Google Scholar 

  • Been, V., Ellen, I., & Madar, J. (2009). The high cost of segregation: Exploring racial disparities in high-cost lending. Fordham Urban Law Journal, 36(3), 361–393.

    Google Scholar 

  • Begley, T., & Purnanandam, A. (2017). Color and credit: Race, regulation, and the quality of financial services. Ann Arbor, MI: University of Michigan, Poverty Solutions. Retrieved March 31, 2018 from https://poverty.umich.edu/files/2017/08/wp-03-17-color-credit.pdf.

  • Bhutta, N. (2014). Payday loans and consumer financial health. Journal of Banking & Finance, 47, 230–242.

    Google Scholar 

  • Bhutta, N., Popper, J., & Ringo, D. R. (2015). The 2014 home mortgage disclosure act data. Federal Reserve Bulletin, 101(4), 1–32.

    Google Scholar 

  • Bocian, D. G., Wei, L., Carolina, K. R., & Roberto, G. Q. (2011). Lost ground, 2011: Disparities in mortgage lending and foreclosures. Durham, NC: Center for Responsible Lending. Retrieved April 3, 2017 from https://www.responsiblelending.org/mortgage-lending/research-analysis/Lost-Ground-2011.pdf.

  • Brown, J., Anthony J. C., & Rawley, H. (2016). Growing up without finance. Aimes, IA: Iowa State University. Retrieved July 15, 2016 from https://foster.uw.edu/wp-content/uploads/2016/07/summer-finance-conf-2-3-brown-cookson-and-heimer-p.pdf.

  • Bruhn, M., & Love, I. (2014). The real impact of improved access to finance: Evidence from Mexico. The Journal of Finance, 69(3), 1347–1376.

    Google Scholar 

  • Buckland, J. (2012). Hard choices: Financial exclusion, fringe banks, and poverty in urban Canada. Toronto: University of Toronto Press.

    Google Scholar 

  • Burkey, M., & Simkins, S. P. (2004). Factors affecting the location of payday lending and traditional banking services in North Carolina. The Review of Regional Studies, 34(2), 191–205.

    Google Scholar 

  • Calem, P. S., & Nakamura, L. I. (1998). Branch banking and the geography of bank pricing. The Review of Economics and Statistics, 80(4), 600–610.

    Google Scholar 

  • California Reinvestment Coalition. (2014). “How banks sell overdraft: Results of overdraft mystery shoppers in four key states.” San Francisco, CA: California Reinvestment Coalition, New Economy Project, Reinvestment Partners, and Woodstock Institute. Retrieved November 15, 2016 from https://woodstockinst.org/wp-content/uploads/2014/08/overdraft.pdf.

  • Campbell, D., Asis Martínez-Jerez, F., & Tufano, P. (2012). Bouncing out of the banking system: An empirical analysis of involuntary bank account closures. Journal of Banking & Finance, 36(4), 1224–1235.

    Google Scholar 

  • Caplovitz, D. (1968). Consumer credit in the affluent society. Law and Contemporary Problems, 33(4), 641–655.

    Google Scholar 

  • Carruthers, B. G., & Ariovich, L. (2010). Money and credit: A sociological approach. Malden, MA: Polity Press.

    Google Scholar 

  • Carruthers, B., & Kim, J.-C. (2011). The sociology of finance. Annual Review of Sociology, 37, 239–259.

    Google Scholar 

  • Caskey, J. P. (1994). Fringe banking: Check cashing outlets, pawnshops, and the poor. New York: Russell Sage Foundation.

    Google Scholar 

  • Celerier, C., & Adrien M. (2016). Bank branch supply and the unbanked phenomenon. Zurich, Switzerland: University of Zurich. Retrieved January 28, 2017 from https://www8.gsb.columbia.edu/faculty-research/sites/faculty-research/files/finance/Finance%2520Seminar/Fall%25202016/Unbanked_October2016.pdf.

  • CFE Fund. (2019). Bank On national account standards 2019–2020. New York, NY: Cities for Financial Empowerment Fund, Bank On Coalition. Retrieved February 10, 2019 from https://cfefund.org/bank-on-national-account-standards-2019-2020/.

  • Chan, S., Gedal, M., Been, V., & Haughwout, A. (2013). The role of neighborhood characteristics in mortgage default risk: Evidence from New York City. Journal of Housing Economics, 22(2), 100–118.

    Google Scholar 

  • Cohen-Cole, E. (2011). Credit card redlining. The Review of Economics and Statistics, 93(2), 700–713.

    Google Scholar 

  • Consumer Financial Protection Bureau. (2013). CFPB study of overdraft programs: A white paper of initial data findings. Washington, DC: Consumer Financial Protection Bureau. Retrieved April 17, 2014 from https://files.consumerfinance.gov/f/201306_cfpb_whitepaper_overdraft-practices.pdf.

  • Cottom, T. M. (2016). Black cyberfeminism: Intersectionality, institutions, and digital sociology. Bristol, UK: Policy Press. Retrieved May 1, 2018 from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2747621.

  • Credit Union National Association (CUNA). (2018). Frequently Requested Credit Union and Bank Comparisons. Retrieved April 9, 2018 from https://www.cuna.org/uploadedFiles/Global/About_Credit_Unions/Frequent-1612.pdf.

  • Davis, G. (2009). Managed by the markets: How finance reshaped America. New York: Oxford University Press.

    Google Scholar 

  • DeYoung, R., Hasan, I., & Kirchhoff, B. (1998). The impact of out-of-state entry on the cost efficiency of local commercial banks. Journal of Economics and Business, 50(2), 191–203.

    Google Scholar 

  • Dwyer, R. E., & Phillips Lassus, L. A. (2015). The great risk shift and precarity in the US housing market. The ANNALS of the American Academy of Political and Social Science, 660(1), 199–216.

    Google Scholar 

  • Eisenberg-Guyot, J., Caislin, F., Marieka, K., & Anjum, H. (2018). From payday loans to pawnshops: Fringe banking, the unbanked, and health. Health Affairs, 37(3), 429.

    Google Scholar 

  • Ellen, I. G., & Turner, M. A. (1997). Does neighborhood matter? Assessing recent evidence. Housing Policy Debate, 8(4), 833–866.

    Google Scholar 

  • Epp, C., Maynard-Moody, S., & Haider-Markel, D. (2014). Pulled over: How police stops define race and citizenship. Chicago: University of Chicago Press.

    Google Scholar 

  • Ergungor, O. E. (2010). Bank branch presence and access to credit in low- to moderate-income neighborhoods. Journal of Money, Credit, and Banking, 42(7), 1321–1349.

    Google Scholar 

  • Faber, J. W. (2013). Racial dynamics of subprime mortgage lending at the peak. Housing Policy Debate, 23(2), 328–349.

    Google Scholar 

  • Faber, J. W. (2018a). Cashing in on distress: The expansion of fringe financial institutions during the Great Recession. Urban Affairs Review, 54(4), 663–696.

    Google Scholar 

  • Faber, J. W. (2018b). Segregation and the geography of creditworthiness: Racial inequality in a recovered mortgage market. Housing Policy Debate, 28(2), 215–247.

    Google Scholar 

  • Faber, J. W. (2019). Segregation and the cost of money: Race, poverty, and the prevalence of alternative financial institutions. Social Forces, 98(2), 819–848.

    Google Scholar 

  • Faber, J. W., & Ellen, I. (2016). Race and the housing cycle: Differences in home equity trends among longterm homeowners. Housing Policy Debate, 26(3), 456–473.

    Google Scholar 

  • Federal Communications Commission. (2018). 2018 Broadband deployment report (GN Docket No. 17–199). Washington, DC: FCC. Retrieved February 1, 2019 from https://docs.fcc.gov/public/attachments/FCC-18-10A1.pdf.

  • Federal Deposit Insurance Corporation. (2012). FDIC survey of banks' efforts to serve the unbanked and underbanked. Washington, DC: FDIC. Retrieved March 16, 2018 from https://www.fdic.gov/unbankedsurveys/.

  • Federal Deposit Insurance Corporation. (2016a). Banks' efforts to serve unbanked and underbanked consumers: Qualitative research. Washington, DC: FDIC. Retrieved March 16, 2018 from https://www.fdic.gov/consumers/community/research/index.html.

  • Federal Deposit Insurance Corporation. (2016b). FDIC national survey of unbanked and underbanked households. Washington, DC: FDIC. Retrieved March 16, 2018 from https://www.fdic.gov/householdsurvey/2015/2015report.pdf.

  • Federal Deposit Insurance Corporation. (2016c). FDIC small business lending survey. Washington, DC: FDIC. Retrieved March 16, 2018 from https://www.fdic.gov/consumers/banking/businesslending/index.html.

  • Fellows, M., & Mabanta, M. (2008). Banking on wealth: America’s new retail banking infrastructure and its wealth-building potential. Washington, DC: Brookings Institution.

  • Fitzpatrick, K. (2017). Bank accounts, nonbank financial transaction products, and food insecurity among households with children. Journal of Consumer Affairs, 51(3), 631–658.

    Google Scholar 

  • Fowler, C., Cover, J. K., & Kleit, R. G. (2014). The geography of fringe banking. Journal of Regional Science, 54(4), 688–710.

    Google Scholar 

  • Friedline, T., & Chen, Z. (2020). Digital redlining and the fintech marketplace: Evidence from United States zip codes. Journal of Consumer Affairs. https://doi.org/10.1111/joca.12297.

  • Friedline, T., Johnson, P., & Hughes, R. (2014). Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation? Federal Reserve Bank of St. Louis Review, 96(4), 359–389.

    Google Scholar 

  • Friedline, T., & Kepple, N. (2017). Does community access to alternative financial services relate to individuals' use of these services? Beyond individual explanations. Journal of Consumer Policy, 40(1), 51–79. https://doi.org/10.1007/s10603-016-9331-y.

    Article  Google Scholar 

  • Friedline, T., Naraharisetti, S., Weaver, A. (2020). Digital redlining: Poor rural communities’ access to fintech and implications for financial inclusion. Journal of Poverty, 24(2), 168–192. https://doi.org/10.1080/10875549.2019.1695162.

    Article  Google Scholar 

  • Friedline, T., West, S., Rosell, N., Serido, J., & Shim, S. (2017). Do community characteristics relate to young adult college students’ credit card debt? The unique role of collective institutional efficacy. American Journal of Community Psychology, 59(1-2), 80–93. https://doi.org/10.1002/ajcp.12116.

    Article  Google Scholar 

  • Gallmeyer, A., & Roberts, W. (2009). Payday lenders and economically distressed communities: A spatial analysis of financial predation. The Social Science Journal, 46, 521–538.

    Google Scholar 

  • Getter, D. E. (2019). The effectiveness of the community reinvestment act (Congressional Research Service Report No. R43661). Retrieved December 10, 2019 from https://fas.org/sgp/crs/misc/R43661.pdf.

  • Gilliard, C., & Culik, H. (2016). Digital redlining, access, and privacy: Filtering content is often done with good intent, but filtering can also create equity and privacy issues. Common Sense Education. Retrieved August 12, 2017 from https://www.commonsense.org/education/articles/digital-redlining-access-and-privacy.

  • Goodstein, R., & Rhine, S. (2017). The effects of bank and nonbank provider locations on household use of financial transaction services. Journal of Banking & Finance, 78, 91–107.

    Google Scholar 

  • Gramlich, E. M. (2007). Subprime mortgages: America’s latest boom and bust. Washington: The Urban Institute.

    Google Scholar 

  • Hall, M., Crowder, K., & Spring, A. (2015). Neighborhood foreclosures, racial/ethnic transitions, and residential segregation. American Sociological Review, 80(3), 526–549.

    Google Scholar 

  • Hannan, T., & Hanweck, G. (2008). Recent trends in the number and size of bank branches: An examination of likely determinants. Washington, DC: Board of Governors of the Federal Reserve. Retrieved September 6, 2013 from https://www.federalreserve.gov/pubs/feds/2008/200802/200802pap.pdf.

  • Hanson, A., Hawley, Z., Martin, H., & Liu, Bo. (2016). Discrimination in mortgage lending: Evidence from a correspondence experiment. Journal of Urban Economics, 92, 48–65.

    Google Scholar 

  • Hwang, J., Hankinson, M., & Brown, K. S. (2015). Racial and spatial targeting: Segregation and subprime lending within and across metropolitan areas. Social Forces, 93(3), 1081–1108.

    Google Scholar 

  • Hyman, L. (2011). Debtor nation: The history of America in red ink. Princeton: Princeton University Press.

    Google Scholar 

  • Hyra, D., Squires, G. D., Renner, R. N., & Kirk, D. S. (2013). Metropolitan segregation and the subprime lending crisis. Housing Policy Debate, 23(1), 177–198.

    Google Scholar 

  • Jackson, K. T. (1985). Crabgrass frontier: The suburbanization of the United States. Oxford: Oxford University Press.

    Google Scholar 

  • JLL. (2017). Bank branches: Navigating a sea of industry change. Chicago, IL: JLL. Retrieved January 10, 2018 from https://www.us.jll.com/united-states/en-us/Research/US-Banking-Outlook-2017-JLL.pdf.

  • Jorgensen, M., & Akee, R. K.Q. (2017). Access to capital and credit in native communities: A data review, digital version. Tucson, AZ: Native Nations Institute. Retrieved May 25, 2018 from https://nni.arizona.edu/application/files/6514/8642/4513/Accessing_Capital_and_Credit_in_Native_Communities__A_Data_Review.pdf.

  • Karger, H. J. (2005). Shortchanged: Life and debt in the fringe economy. San Francisco: Berrett-Koehler Publishers.

    Google Scholar 

  • Kashian, R., & Drago, R. (2017). Minority-owned banks and bank failures after the financial collapse. Economic Notes, 46(1), 5–36.

    Google Scholar 

  • Kerr, W., & Nanda, R. (2009). Democratizing entry: Banking deregulations, financial constraints, and entrepreneurship. Journal of Financial Economics, 94(1), 124–149.

    Google Scholar 

  • Kiviat, B. (2017). The art of deciding with data: Evidence from how employers translate credit reports into hiring decisions. Socio-Economic Review, 17, 283.

    Google Scholar 

  • Kubrin, C., Squires, G. D., Graves, S. M., & Ousey, G. C. (2011). Does fringe banking exacerbate neighborhood crime rates? Criminology & Public Policy, 10(2), 437–466.

    Google Scholar 

  • Law Commission of Ontario. (2008). Fees for cashing government cheques: Final report. Retrieved October 8, 2017 from https://www.lco-cdo.org/en/content/fees-cashing-government-cheques.

  • Massey, D. S., & Denton, N. A. (1993). American Apartheid: Segregation and the making of the underclass. Cambridge: Harvard University Press.

    Google Scholar 

  • Massey, D. S., Rugh, J. S., Steil, J. P., & Albright, L. (2016). Riding the stagecoach to hell: A qualitative analysis of racial discrimination in mortgage lending. City & Community, 15(2), 118–136.

    Google Scholar 

  • Matheny, W., O'Brien, S., & Wang, C. (2016). The state of cash: Preliminary findings from the 2015 diary of consumer payment choice. San Francisco, CA: Federal Reserve Bank of San Francisco. Retrieved November 3, 2016 from https://www.frbsf.org/cash/publications/fed-notes/2016/november/state-of-cash-2015-diary-consumer-payment-choice.

  • Melzer, B. (2011). The real costs of credit access: Evidence from the payday lending market. The Quarterly Journal of Economics, 126(1), 517–555. https://doi.org/10.1093/qje/qjq009.

    Article  Google Scholar 

  • Minnesota Population Center. (2011). National Historical Geographic Information System: Version 2.0. University of Minnesota. Retrieved June 8, 2017 from https://www.nhgis.org/.

  • Morduch, J., & Schneider, R. (2017). The financial diaries: How American families cope in a world of uncertainty. Princeton: Princeton University Press.

    Google Scholar 

  • Morgan, D., Maxim, P., & Bryan, Y. (2016). Banking deserts, branch closings, and soft information. New York, NY: Federal Reserve Bank of New York, Liberty Street Economics. Retrieved March 7, 2016 from https://libertystreeteconomics.newyorkfed.org/2016/03/banking-deserts-branch-closings-and-soft-information.html.

  • Morgan State University. (2017). Understanding life in financial deserts. Baltimore, MD: Morgan State University, School of Community Health and Policy, Earl G. Graves School of Business and Management. Retrieved June 3, 2017 from https://www.masteryourcardusa.org/wp-content/uploads/2017/02/MSU-Understandling-Life-in-Financial-Deserts_digital.pdf.

  • Munnell, A. H., Tootell, G. M. B., Browne, L. E., & Mceneaney, J. (1996). Mortgage lending in Boston: Interpreting HMDA data. American Economic Review, 86(1), 25–53.

    Google Scholar 

  • Nguyen, H.-L. (2019). Are credit markets still local? Evidence from bank branch closings. American Economic Journal: Applied Economics, 11(1), 1–32. https://doi.org/10.1257/app.20170543.

    Article  Google Scholar 

  • Nopper, T. (2019). Digital character in “the scored society”: FICO, social networks, and competing measurements of creditworthiness. In R. Benjamin (Ed.), Captivating technology: Race, carceral technoscience, and liberatory imagination in everyday life (pp. 170–187). Durham, NC: Duke University Press.

    Google Scholar 

  • Northwood, J., & Rhine, S. (2018). Use of bank and nonbank financial services: Financial decision making by immigrants and native born. Journal of Consumer Affairs, 52(2), 317–348.

    Google Scholar 

  • Pager, D., & Shepherd, H. (2008). The sociology of discrimination: racial discrimination in employment, housing, credit, and consumer markets. Annual Review of Sociology, 34, 181–209.

    Google Scholar 

  • Pattillo, M. (1999). Black picket fences: Privilege and peril among the black middle class. Chicago: University of Chicago Press.

    Google Scholar 

  • Pew Charitable Trusts. (2014). Overdrawn: Consumer experiences with overdraft. Washington, DC: Pew Charitable Trusts. Retrieved June 27, 2014 from https://www.pewtrusts.org/en/research-and-analysis/reports/2014/06/26/overdrawn-consumer-experiences-with-overdraft.

  • Piketty, T. (2014). Capital in the 21st century. Cambridge: Harvard University Press.

    Google Scholar 

  • Public Knowledge. (2019). Rural broadband access and communities of color. Washington, DC: Public Knowledge. Retrieved December 10, 2019 from https://www.publicknowledge.org/assets/uploads/blog/Rural_Broadband_Racial_Justice_Fact_Sheet.pdf.

  • Reardon, S. (2002). SEG: Stata module to compute multiple-group diversity and segregation indices. EconPapers. Retrieved April 18, 2018 from https://econpapers.repec.org/software/bocbocode/s375001.htm.

  • Reichard, R. (2017). Latino/a vs. Latinx vs. Latine: Which word best solves spanish’s gender problem? Latina. Retrieved March 30, 2017 from http://www.latina.com/lifestyle/our-issues/latinoa-latinx-latine-solving-spanish-gender-problem.

  • Reid, C. K., Bocian, D., Li, W., & Quercia, R. G. (2017). Revisiting the subprime crisis : The dual mortgage market and mortgage defaults by race and ethnicity. Journal of Urban Affairs, 39(4), 469–487.

    Google Scholar 

  • Reskin, B. (2012). The race discrimination system. Annual Review of Sociology, 38, 17–35.

    Google Scholar 

  • Rivlin, G. (2010). Broke, USA: From pawnshops to poverty, Inc.—How the working poor became big business. New York: Harper Collins.

    Google Scholar 

  • Ross, S. L., & Yinger, J. (2002). The color of credit: Mortgage discrimination, research methodology, and fair-lending enforcement. Cambridge: The MIT Press.

    Google Scholar 

  • Rothstein, R. (2017). Color of law: A forgotten history of how our government segregated America. New York: Liveright Publishing.

    Google Scholar 

  • Rugh, J. S. (2015). Double jeopardy: why latinos were hit hardest by the US foreclosure crisis. Social Forces, 93(3), 1139–1184.

    Google Scholar 

  • Rugh, J. S., & Massey, D. S. (2010). Racial segregation and the American foreclosure crisis. American Sociological Review, 75(5), 629–651.

    Google Scholar 

  • Rugh, J. S., Albright, L., & Massey, D. S. (2015). Race, space, and cumulative disadvantage: A case study of the subprime lending collapse. Social Problems, 62(2), 186–218.

    Google Scholar 

  • Saegert, S., Fields, D., & Libman, K. (2011). Mortgage foreclosure and health disparities: Serial displacement as asset extraction in African American populations. Journal of Urban Health, 88(3), 390–402.

    Google Scholar 

  • Servon, L. (2017). The unbanking of America: How the new middle class survives. New York: Houghton Mifflin Harcourt.

    Google Scholar 

  • Sharkey, P., & Faber, J. W. (2014). Where, when, why, and for whom do residential contexts matter? Moving away from the dichotomous understanding of neighborhood effects. Annual Review of Sociology, 40, 559–579.

    Google Scholar 

  • Small, M. L., & McDermott, M. (2006). The Presence of organizational resources in poor urban neighborhoods: An analysis of average and contextual effects. Social Forces, 84(3), 1697–1724.

    Google Scholar 

  • Smith, T., Smith, M., & Wackes, J. (2008). Alternative Financial Service Providers and the Spatial Void Hypothesis. Regional Science and Urban Economics, 38(3), 205–227.

    Google Scholar 

  • Studenmund, W. (2006). Using econometrics: A practical guide. London: Pearson.

    Google Scholar 

  • Toussaint-Comeau, M., & Newberger, R. (2017). Minority-owned banks and their primary local market areas. Chicago: The Federal Reserve Bank of Chicago.

    Google Scholar 

  • Wattles, J. (2017). Americans Paid $15 Billion in Overdraft Fees Last Year, CFPB Says. CNN Money. Retrieved August 4, 2017 from https://money.cnn.com/2017/08/04/pf/overdraft-fees-cfpb/index.html.

  • Yngvesson, B. (1988). Making law at the doorway: The clerk, the court, and the construction of community in a New England Town. Law & Society Review, 22(3), 409–448.

    Google Scholar 

  • Zacka, B. (2017). When the state meets the street: Public service and moral agency. Cambridge: Harvard University Press.

    Google Scholar 

Download references

Acknowledgements

The authors thank Drs. Jackelyn Hwang, Elizabeth Roberto, and Emily Rauscher for providing feedback on an earlier version of this manuscript. The authors bear full responsibility for the paper. The data used in this manuscript were collected via a grant from MetLife Foundation to Dr. Friedline; though, the authors received no funding for analyzing the data and writing this manuscript.

Author information

Author notes

  1. Jacob William Faber and Terri Friedline have contributed equally to this manuscript.

Authors and Affiliations

  1. New York University Wagner School of Public Service, 295 Lafayette Street, New York, NY, 10012, USA

    Jacob William Faber

  2. University of Michigan School of Social Work, 1080 S University Ave, Ann Arbor, MI, 48109, USA

    Terri Friedline

Authors
  1. Jacob William Faber
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Terri Friedline
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Terri Friedline.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Electronic supplementary material

Below is the link to the electronic supplementary material.

Supplementary file1 (DOCX 301 kb)

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Faber, J.W., Friedline, T. The Racialized Costs of “Traditional” Banking in Segregated America: Evidence from Entry-Level Checking Accounts. Race Soc Probl 12, 344–361 (2020). https://doi.org/10.1007/s12552-020-09296-y

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12552-020-09296-y

Keywords

  • Banking
  • Finance
  • Checking accounts
  • Race
  • Segregation