Factors Affecting the Location of Payday Lending and Traditional Banking Services in North Carolina

Payday lending is a relatively new and fast growing segment of the “fringe banking” industry. This paper offers a comparative, descriptive analysis of the location patterns of traditional banks and payday lenders. Utilizing a dataset at the Zip Code Tabulation Area level in North Carolina, we perform negative binomial regressions and find evidence supporting some, but not all, common assertions about the location patterns of both types of institutions. A key finding is that after controlling for many covariates, race is still a powerful predictor of the locations of both banks and payday lenders.