Resilient Finance, Stratified Costs: Unmasking Racial Disparities in Disaster-Induced Bank Closures

Climate disasters and bank branch closures can reshape mortgage credit without obvious changes in headline approval rates. Using Home Mortgage Disclosure Act applications matched to county disasters (SHELDUS) and branch closures (S&P Global), we estimate race-specific difference-in-differences and dynamic responses. In disaster counties, closures shift tightening for Black borrowers toward nonprice margins—higher debt-to-income ratios and liquidity flags—rather than higher denials. In adjacent counties, spillovers operate through tighter selection and longer maturities. Branch-network resilience appears central to equitable postdisaster recovery.